LIBRARY 

UNIVERSITY  OF  CALIFORNIA 
RIVERSIDE 


IN  COMMEMORATION  OF  THE  WORK  OF 

THE  EIGHT  THOUSAND  YALE  MEN 
WHO  TOOK  PART  IN  THE  WORLD  WAR 

1914-1918 


HOW  AMERICA  WENT  TO  WAR 

THE  GIANT  HAND 

THE  ROAD  TO  FRANCE  I. 

THE  ROAD  TO  FRANCE  II. 

THE  ARMIES  OF  INDUSTRY  I. 

THE  ARMIES  OF  INDUSTRY  II. 

DEMOBILIZATION 


HOW  AMERICA  WENT 
TO  WAR 

AN  ACCOUNT  FROM  OFFICIAL  SOURCES  OF 
THE  NATION'S  WAR  ACTIVITIES 

1917-1920 


THE  GIANT  HAND 

OUR  MOBILIZATION  AND  CONTROL  OF 
INDUSTRY  AND  NATURAL  RESOURCES 

1917-1918 


BY  BENEDICT  CftOWELL 

THE  ASSISTANT  SECRETARY  OF  WAR  AND 
DIRECTOR  OF  MUNITIONS   1917-1920 

AND  ROBERT  FORREST  WILSON 

FORMERLY  CAPTAIN,  UNITED  STATES  ARMY 

ILLUSTRATED  WITH  PHOTOGRAPHS  FROM  THE 
COLLECTIONS  OF  THE  WAR  AND  NAVY  DEPARTMENTS 


NEW  HAVEN 

YALE  UNIVERSITY  PRESS 

LONDON  •  HUMPHREY  MILFORD  •  OXFORD  UNIVERSITY  PRESS 

MDCCCCXXI 


COPYRIGHT,  1921,  BY 
YALE  UNIVERSITY  PRESS 


CONTENTS 

PAGE 
Authors'  Foreword      ........          ad 

Preface      ..........      xxix 

CHAPTER 

I.     The  Control  of  War  Industry          ....  i 

II.     The  Creation  of  the  War  Industries  Board       .          .          17 

III.  Priority 36 

IV.  Industrial  Conversion  and  Conservation  ...         57 
V.     Price  Fixing          .          .          .          .          .          .          .71 

VI.  Allied  Purchases,  Clearances,  and  Labor  ...         84 

VII.  Commodity  Sections — Steel     .....         99 

VIII.  Nitrates — Glass — Dyes — Chemicals           .          .          .114 

IX.  Copper  and  Explosives           .          .          .          .          .128 

X.  Foreign  Activities           .          .          .          .          .          .143 

XI.  Organization  and  Personnel    .          .          .          .          .160 

Index  181 


ILLUSTRATIONS 

War  Buildings  in  Washington Frontispiece 

The  "War  Cabinet" Opposite  page    xi 

Portrait  of  Howard  E.  Coffin 4 

A  War  Ordnance  Factory 10 

Machining  3-inch  Shell 10 

In  an  Airplane  Factory      . 14 

Liberty  Engines  at  Testing  Sheds 14 

DeHaviland  Airplanes  Ready  for  Shipment  from  Factory  18 

Rocking  Test  for  Gyroscope  Compasses     ....  18 

Portrait  of  Frank  A.  Scott "22 

Portrait  of  Daniel  Willard "26 

Portrait  of  Bernard  M.  Baruch 30 

The  War  Industries  Board "34 

In  a  Big  Gun  Plant "38 

Making  Rifle  Cartridges    . "38 

Portrait  of  Edwin  B.  Parker "42 

Machining  Big  Gun  Forgings     ......  46 

Finishing  Big  Guns  for  U.  S.  Forces  .....  46 

Rough  Forgings  for  9.2-inch  Shell 52 

Steel  Billets  at  Munitions  Plant "52 

Hammering  Steel  for  Gun  Shields      .....  56 

View  in  Army  Textile  Mill        ......  56 

Assembling    Shell    Fuses    in    Former    Computing-machine 

Factory         .........  "60 

Former   Printing-machinery   Factory   Making   Shell   Fuses  60 

Bottle-cap  Factory  Making  Machine  Gun  Tripods     .         .  64 

Stove  Works  Casting  Trench-mortar  Shell          ...  "64 

Ordnance  Trucks  Ready  for  Shipment        ....  "68 

Knitting  Socks  for  American  Soldiers          ....  "68 

Waterproofing  Trench  Signal  Rockets         ....  "72 

An  Army  Uniform  Factory        ......  "72 

Ten  Thousand  Finished  Cylinders  for  Many  War  Uses     .  "       72 

Manufacturing  Shell  for  the  75*3       .....  "72 

Portrait  of  Robert  S.  Brookings "76 

Forgings  for  155-millimeter  Shell  Spaced  for  Cooling         .  "       80 

Making  155-millimeter  Howitzer  Carriages          ...  80 

Rifling  12-inch  and  14-inch  Guns         .....  "80 

American  Army  Shell  Made  in  Canada       ....  "80 

Fourteen-inch  Gun  Loaded  for  Shipment  ....  "84 


x  ILLUSTRATIONS 

Manufacturing  3-3-inch  Guns Opposite  page    84 

Portrait  of  Robert  S.  Lovett "88 

Chassis  of  Ordnance  Trucks "92 

Women  Munitions  Workers  in  Steel  Plant         ...  "92 

Portrait  of  Hugh  Frayne            .                           ...  "96 

Testing  Army  Rifles "      10O 

Completed  6-inch  Trench  Mortars "      100 

Production  Clock  at  Shell  Factory "      104 

Construction  of  Eagle  Boat  at  Ford  Plant,  Detroit     .         .  "      104 

Portrait  of  Colonel  Palmer  E.  Pierce          ....  "108 

Portrait  of  J.  Leonard  Replogle "      112 

Finishing  Process  in  Manufacture  of  Big  Guns  ...  "116 

Liquid  Air  Department,  U.  S.  Nitrates  Plant  No.  2  .         .  "      116 

Twenty-four-inch   Searchlights "      120 

Boilers  for  Destroyers "      120 

Making  Overseas  Caps 120 

Wing  of  a  War  Factory "      120 

An  Army  Toluol  Recovery  Plant "124 

Distilling  Toluol  from  Municipal  Gas       ....  124 

Copper  Bands  for  Shell "128 

Three-inch  Brass  Cartridge  Cases "128 

Packing  Shell  Fuses "132 

Boiling  Tubs  for  Smokeless  Powder          ....  "132 

Portrait  of  D.  C.  Jackling "136 

T.  N.  T.  Cooling  and  Crystallizing "140 

A  T.  N.  T.  Plant "140 

Shaft  for  U.  S.  Destroyer "144 

Battery  of  Shell  Machines "144 

Making  Rope  for  Army 148 

Shell  Steel  Being  Cut  into  Billets "  "148 

Portrait  of  L.  L.  Summers 152 

Shell  Ingots  Fresh  from  Pouring  Floor      ....  "      156 

Boring  Shell  for  75's "156 

Assembling  Flying  Boats  for  Navy 156 

Canning  Vegetables  in  Tins  for  Army        ....  156 

Precision  Machinery  for  Making  Gyro-compasses        .         .  160 

Thomas-Morse  Fuselages  Ready  to  be  Covered  ...  160 

Portrait  of  Alexander  Legge 164 

Portrait  of  George  N.  Peek "  "168 

Portrait  of  Admiral  F.  F.  Fletcher "172 

Judge  Parker  Presents  Loving  Cup  to  Chairman  Baruch     .  178 


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AUTHORS'  FOREWORD 

THERE  is  no  need  here  to  plead  for  the  importance  of 
war  industry,  either  that  of  the  recent  war  or  that  of 
wars  to  come,  as  far  as  we  can  see  into  the  future. 
Warfare  since  1914  has  undergone  a  tremendous  evolution — 
the  change  from  the  mail  and  harquebuses  of  the  Spanish  con- 
quest of  the  Americas  to  the  ordnance  known  in  the  Civil  War 
was  not  greater.  The  labor-saving  machine  has  come  into  war- 
fare, to  the  immense  multiplication  of  the  power  of  the  indi- 
vidual soldier.  Soldiers  have  become  machine  operatives. 

Machinery — what  a  range  of  it  was  called  into  existence  in 
those  memorable  four  years !  Nor  was  it  all  the  machinery  of 
killing  and  destruction.  Besides  the  machine  guns,  the  co- 
ordination of  battery  fire  for  the  barrages,  the  tanks,  the  trench 
mortars,  the  linked-up  projectors  for  hurling  at  one  discharge 
clouds  of  tumbling  missiles  filled  with  poison-gas,  the  long- 
range  railroad  guns — besides  these,  purely  the  machinery  of 
killing,  there  were  machines  for  magnifying  the  power  of  the 
individual  soldier  in  many  field  activities.  Machines  moved 
the  artillery  and  brought  up  the  supplies.  Machines  navigated 
the  air.  Machines  built  the  roads  and  restored  the  bridges. 
Machines  delivered  the  messages.  Machines  put  the  com- 
mander in  instant  touch  with  every  element  of  his  forces,  even 
though  they  held  a  battle  front  many  miles  in  extent.  Even 
that  romantic  figure  of  the  past,  the  military  spy,  yielded  his 
place  to  machinery,  as  human  ingenuity  invented  devices  that 
"listened  in"  on  the  enemy's  wire  and  wireless  communica- 
tions, detected  his  mining  operations,  betrayed  the  movements 
of  his  armies,  recorded  the  footfalls  of  his  nocturnal  raiding 
parties,  and  automatically  spotted  the  positions  of  his  artillery. 


xii  AUTHORS'  FOREWORD 

Hence  when  we  entered  the  struggle  it  was  upon  America's 
magnificent  industrial  fabric,  her  shops,  her  shipyards,  and  her 
railroads,  that  the  Allies  looked  with  the  greater  hope,  rather 
than  upon  her  well-nigh  limitless  resources  of  men.  We,  too, 
regarded  that  structure  as  a  talisman  of  victory,  as  something 
which  would,  in  some  marvelous,  hazily  understood  way,  take 
the  limitless  supplies  of  America's  raw  materials  and  turn 
them  into  war  machines  in  such  quantities  as  to  leave  no  ques- 
tion of  the  outcome  of  the  war.  America  felt  secure.  It  is  only 
necessary  to  recount  that  in  many  quarters,  both  in  the  United 
States  and  abroad,  it  was  first  thought  that  America's  chief 
contribution  would  be  a  vast  aerial  force.  Washington  would 
touch  a  button,  and  forth  from  the  doors  of  American  factories 
would  issue  a  cloud  of  airplanes,  with  which  America  in  bril- 
liant fashion  would  preempt  the  new  field,  and  in  the  air  win 
a  victory  which  it  had  not  been  possible  for  the  Allies  to  win  on 
the  ground. 

What  must  have  been  the  disillusion  of  the  members  of  the 
military  missions  which  the  principal  Allies  sent  to  America  in 
the  spring  of  1917  to  begin  making  the  arrangements  for  the 
cooperation  of  America  in  the  war !  They,  in  common  with  the 
rest  of  Europe,  shared  with  the  masses  of  the  American  public 
an  implicit  belief  in  the  invincibility  of  American  industry,  out 
of  which  they  had  seen  come  such  prodigies  as  the  Panama 
Canal,  the  range  of  modern  labor-saving  machinery,  and  that 
standardization  and  serial  coordination  of  specialized  effort 
which  we  know  as  quantity  production.  It  was  not  too  much  to 
expect  of  that  industry  that,  properly  organized  and  directed, 
it  would  indeed  produce  the  marvels  for  which  Europe  was 
waiting  and  would  break  the  military  deadlock  which  the  war 
industry  of  Europe  had  not  been  able  to  affect. 

Yet  when  these  foreigners  reached  Washington,  what  did 
they  find?  A  complete  absence  of  effective  industrial  prepara- 
tion for  the  ordeal  ahead.  Nothing  done.  Industry  trying  to  co- 
ordinate itself  into  a  single  war  machine,  but  groping  ahead 
painfully  in  a  fog  of  ignorance  and  misapprehension,  without 
plans,  looking  for  direction  to  an  organization  in  Washington 


AUTHORS'  FOREWORD  xiii 

tragically  inefficient  and  ill-adapted  to  the  effort  to  come. 
Those  who  had  arrived  fresh  from  the  theatre  of  war,  who  were 
familiar  with  the  progress  that  had  been  made  in  the  develop- 
ment of  war  machinery,  but  who  knew  by  bitter  experience 
what  evolution  the  organization  of  a  nation  for  war  must 
undergo  before  reaching  efficiency,  must  have  seen  at  once  that 
no  miracles  were  to  be  expected  of  American  war  industry  for 
many,  many  months.  Before  a  war  industry  could  produce,  it 
had  to  exist — it  had  to  come  forth  as  an  organized  entity  from 
the  heterogeneous  assemblage  of  American  factories;  and  the 
pangs  of  that  parturition  were  bound  to  be  protracted  and 
painful.  America  had  failed  to  profit  by  what  had  been  going 
on  in  Europe  for  almost  three  years. 

Our  military  guests  courteously  refrained  then  and  there- 
after from  any  expressions  of  disappointment;  but  it  is  signifi- 
cant that  they  began  immediately  to  lay  stress  upon  the  neces- 
sity of  our  participation  in  the  war  with  troops,  a  concept 
which  at  that  time  fell  strangely  upon  our  ears.  Up  to  that 
moment  we  had  counted  on  making  our  participation  chiefly 
industrial  in  character — by  supplying  a  tremendous  amount 
of  machinery  with  which  the  Allies,  aided  by  a  small  force  of 
our  own,  could  win. 

Yet  we  had  made  no  preparation  for  participation  of  that 
sort.  For  three  years  America  had  stood  insecurely  on  the 
brink  of  war  and  had  not  made  the  first  move  toward  pro- 
viding herself  with  the  machinery  that  could  save  her  if  she 
fell  in.  Of  the  danger  itself  that  America  might  be  drawn  into 
the  struggle  there  was  no  question.  The  Administration  in 
1916  was  returned  to  power  because  for  the  two  years  preced- 
ing the  election  it  had  been  able  to  keep  America  out  of  the 
war — an  event  which  was  in  itself  a  confession  of  the  universal 
realization  of  our  danger.  Yet  there  was  no  assurance  that  the 
policy  which  had  been  successful  in  keeping  America  neutral 
up  to  the  fall  of  1916  would  continue  its  successes  thereafter. 
The  President  continually  told  his  audiences  that  the  world 
was  on  fire,  the  sparks  falling  everywhere,  and  no  one  knew 
where  the  next  blaze  might  be  kindled.  It  was  evident  that  at 


xiv  AUTHORS'  FOREWORD 

any  time  might  arise  the  situation  which  would  make  our 
further  neutrality  impossible.  Against  that  contingency  it 
would  have  been  only  common  sense  to  prepare. 

Nor  can  it  be  pleaded  that  the  country  then  would  not  have 
followed  any  leadership,  even  leadership  as  magnetic  as  the 
President's  then  was,  into  a  program  of  war  production  during 
a  time  of  peace,  with  all  that  such  a  program  implied  in  the 
issue  of  bonds  and  the  dislocation  of  normal  industry.  It  is 
probably  true  that  before  the  actual  declaration  of  war  the 
public  would  have  been  unwilling  to  mortgage  itself  for  the 
billions  which  would  have  had  to  be  spent  to  prepare  America 
with  an  adequate  armament;  and  true  also  that  anything  less 
than  an  adequate  armament  would  scarcely  have  been  worth 
the  trouble.  It  is  not  contended  here  that  the  Administration 
should  have  attempted  the  actual  production  of  war  materials 
on  a  war  scale.  It  is  contended  that  an  immense  amount  of  pre- 
liminary work  in  industrial  preparedness  might  have  been 
accomplished,  and  at  a  trifling  cost.  A  word  of  warning  from 
those  to  whom  the  public  looked  for  its  military  protection,  a 
statement  of  the  necessities,  and  Congress,  with  the  approval 
of  the  people,  would  have  voted  the  few  millions  which  the 
War  Department  would  have  required  in  financing  a  scientific 
and  minute  study  of  conditions  in  Europe  and  a  remodeling 
of  our  own  military  and  industrial  plans  and  organization  in 
conformity  with  the  lessons  which  the  Allies  had  learned. 

Instead  of  the  attitude  of  prudence  which  we  might  have 
expected  of  Washington  in  those  days,  we  find  an  official  indif- 
ference to  the  future  that  is  not  to  be  explained.  The  authori- 
ties could  not  righteously  plead  ignorance  of  the  advancement 
of  the  science  of  warfare.  Almost  from  the  outbreak  of  the 
war  in  August,  1914,  we  had  succeeded  in  placing  observers 
with  the  various  armies  in  the  field.  The  reports  of  these 
observers  were  filled  with  data  showing  the  deficiencies  of  our 
own  military  organization  for  war  on  the  modern  scale  and  the 
obsolescence  of  most  of  our  materiel.  On  these  reports  might 
have  been  based  a  complete  rejuvenation  of  our  designs  and 
methods,  but  what  actually  happened  was  that  the  reports 


AUTHORS'  FOREWORD  xv 

were  filed  away  in  the  archives  of  the  War  College  to  gather 
the  dust  of  official  neglect. 

Yet  this  preliminary  and  relatively  inexpensive  preparation 
might  have  made  a  tremendous  difference  to  the  accomplish- 
ments of  our  war  industry.  Think  what  it  might  have  done 
for  our  aircraft  program !  If  the  first  two  years  of  the  war  in 
Europe  demonstrated  anything,  they  demonstrated  that  an 
entirely  new  arm  of  service  had  come  into  existence.  The 
Powers  in  Europe  were  rapidly  raising  their  air  services  to  the 
independence  and  dignity  enjoyed  by  their  land  and  naval 
forces.  But  what  was  the  place  of  aviation  in  the  American 
military  organization?  Far  from  being  a  separate  service,  it 
did  not  exist  even  on  a  parity  with  the  function  of  providing 
food  and  clothing  for  the  Army.  Aviation  existed  in  the  Ameri- 
can Army  until  May  20,  1918,  as  a  subf unction  of  the  Signal 
Corps.  With  aviation  occupying  such  a  status  in  this  country, 
it  is  not  surprising  that  we  entered  the  war  in  1917  almost  as 
ignorant  of  the  science  of  military  aviation  as  any  tribe  of 
South  Sea  islanders. 

In  June,  1917,  two  months  or  more  after  the  declaration  of 
war,  we  sent  to  Europe  a  commission  of  engineers  to  begin,  at 
that  late  date,  the  study  of  aviation  which  should  have  been 
started  at  least  a  year  earlier,  and  which  better  might  have  been 
started  two  years  earlier — for  as  early  as  1915  the  importance 
of  aviation  in  warfare  was  beginning  to  assert  itself. 

As  with  aircraft,  so  with  many  other  branches;  with  the 
result  that,  when  the  armistice  came,  those  whose  attention 
had  been  absorbed  for  many  months  in  the  production  of  mili- 
tary supplies  discovered  with  dismay  that  their  efforts  were 
quite  generally  regarded  in  the  country  as  a  failure.  They 
knew  not  quite  what  to  make  of  this  attitude  nor  whence  it 
sprang,  since  they  themselves  were  only  aware  of  the  tremen- 
dous accomplishments  in  the  very  thing  thus  discounted  and 
condemned. 

In  time  there  arose  two  extreme  opinions  as  to  the  value  of 
our  war  industrial  effort.  The  one,  voiced  prominently  by  such 
figures  as  Senator  Lodge,  branded  the  supply  program  of  the 


xvi  AUTHORS'  FOREWORD 

Army  a  failure,  principally  because  it  failed  to  deliver  to  the 
American  Expeditionary  Forces  in  time  to  be  used  at  the  front 
any  American-built  artillery  or  service  airplanes,  or  at  least 
any  appreciable  quantities  of  them.  And  if  this  were  thought 
to  be  a  partisan  and  prejudiced  attack,  then  one  could  go  to 
the  official  records  of  the  A.  E.  F.  and  find  similar  statements 
in  General  Pershing's  own  reports. 

The  opposite  opinion  was  that  the  industrial  program,  as  a 
whole,  was  a  success.  This  was  essentially  the  opinion  of  indus- 
try itself,  of  the  men  who  gave  their  best  to  the  enterprise. 
These  men,  having  shared  in  the  wonderful  response  which 
American  industry  made  to  the  tocsin  of  war,  and  having 
lived  amid  the  expansion  which,  before  the  war  ended,  built 
up  a  tremendous  capacity  for  the  production  of  military  sup- 
plies, saw  in  our  industrial  enterprise  something  wholly  to  the 
credit  and  glory  of  the  United  States. 

Here,  then,  was  a  contradiction  which,  apparently,  was  not 
to  be  reconciled.  On  the  one  side  an  attack,  based  on  indis- 
putable facts,  against  the  enduring  fame  of  our  war  industry 
in  the  World  War:  on  the  other,  a  defense  of  that  record 
equally  vehement  and  backed  by  authority  equally  unim- 
peachable. Such  contrariety  of  official  statement  could  result 
in  nothing  but  confusion  in  the  mind  of  the  public.  Out  of 
such  confusion  are  born  legends  eventually  to  find  their  way 
into  history,  to  the  eternal  suppression  of  truth.  It  is  impor- 
tant, then,  that  these  two  extreme  positions  be  reconciled,  if 
possible — and  it  should  be  possible  to  reconcile  them,  because 
one  truth  cannot  actually  be  out  of  harmony  with  another. 
What  we  must  find  is  the  measuring  rod  to  evaluate  the  work 
of  the  country  correctly. 

Either  one  of  the  extreme  opinions  as  to  the  creditableness 
of  our  munitions  production  was,  perhaps,  tenable ;  but  neither 
one  alone  was  quite  the  truth.  The  clue  may  be  found  in  the 
story  of  the  would-be  traveler  who,  bag  in  hand,  dashed 
through  the  railroad  station  of  a  country  town  and  then  on 
down  the  track  in  a  vain  effort  to  overtake  a  passenger  train 
which  had  just  pulled  out.  As  he  returned,  crestfallen,  a 


AUTHORS'  FOREWORD  xvii 

lounger  said  to  him:  "Well,  you  didn't  run  fast  enough,  did 
you*?"  "Yes,"  he  replied,  "I  ran  fast  enough.  The  trouble  is, 
I  didn't  start  soon  enough." 

And  that  was  just  the  trouble  with  our  war  industry:  when 
it  got  fairly  started,  it  became  something  entirely  creditable 
to  the  greatness  of  American  industry;  and  the  world  had 
never  seen  progress  so  rapid,  on  a  scale  of  such  splendor : — but 
it  started  at  least  half  a  year  too  late ! 

The  lack  of  foresight  in  the  administration  of  the  War 
Department  during  the  critical  prewar  months  can  scarcely  be 
overemphasized.  There  seems  to  have  been  an  utter  disregard 
of  the  danger  of  America's  position,  an  unconcern  for  the 
future  that  seems  incredible.  The  direction  of  effort  seems  not 
to  have  viewed  actual  war,  on  the  modern  scale,  as  among  the 
possibilities  for  America.  We  have  noted  the  lamentable 
ignorance  of  the  science  of  aviation  in  the  Army  in  1917; 
but  for  that  there  was  at  least  the  excuse  that  the  science  was 
entirely  new,  having  been  developed  almost  exclusively  within 
the  war  zone  in  Europe.  What,  though,  can  be  said  for  an 
almost  equal  ignorance  of  the  business  of  supplying  to  a  mod- 
ern army  such  things  as  uniforms,  food,  rifles,  and  ammuni- 
tion— things  which  American  troops  had  used  and  consumed 
since  America  was  a  nation  at  all*?  The  War  in  Europe  had 
scrapped  and  rendered  valueless  all  previous  experience  in  the 
consumption  of  such  supplies  by  armies,  for  war  had  entered 
a  new  era  of  destructiveness.  Yet  our  War  College,  the  body 
upon  which  the  nation  relied  for  its  study  of  warfare,  evidently 
came  right  up  to  the  declaration  of  war  without  having  re- 
ceived any  instructions  to  procure  the  indispensable  informa- 
tion about  the  consumption  of  the  commoner  supplies  by  large 
bodies  of  troops — the  very  information  upon  which  manufac- 
turing programs  had  to  be  based.  When  Mr.  Frank  A.  Scott 
in  April,  1917,  immediately  after  the  declaration  of  war, 
organized  the  General  Munitions  Board,  one  of  his  first  acts 
was  to  send  to  the  General  Staff  for  its  studies  in  supply  prob- 
lems. In  return  he  received  a  few  pamphlets  of  no  practical 
value  whatsoever. 


xviii  AUTHORS'  FOREWORD 

All  of  this  preliminary  work,  which  is  an  essential  part  of 
preparedness  and  a  time-consuming  part  of  it,  should  have 
been  done  before  we  entered  the  war.  It  would  have  cost  effort 
rather  than  money,  and  the  country  was  entitled  to  that  much 
insurance.  Of  course,  after  we  entered  the  war,  this  same  pre- 
liminary work  had  to  be  done  before  the  manufacturing  pro- 
gram could  make  any  proper  headway. 

Be  that  as  it  may,  we  declared  war  against  Germany;  and 
was  there  then  to  be  observed  among  those  responsible  a  reali- 
zation of  the  time  already  wasted  and  a  determination  to  make 
amends  by  jumping  in  and  laying  the  foundation  for  a  scien- 
tific war  industry  without  further  temporizing'?  Not  at  all. 
Although  there  was  a  tremendous  bustle  and  activity  in  Wash- 
ington, and  although  in  some  branches  of  warfare  great 
achievements  were  written,  in  the  branch  which  dealt  with  the 
production  of  the  war  supplies  a  nightmare  of  indecision  and 
lethargy  seemed  to  grip  the  war  department  administration. 
Let  us  look  at  one  or  two  instances  of  official  dilatoriness. 

In  one  of  the  volumes  of  this  series*  is  told  the  story  of  our 
manufacture  of  the  Browning  machine  guns,  and  a  dramatic 
story  it  was — one  of  the  great  achievements  of  our  war  indus- 
try. Here  was  a  concrete  illustration  of  what  American  indus- 
try could  do — after  it  got  started.  But  when  did  it  start"?  The 
facts  are  these : 

The  evolution  of  warfare  in  Europe,  bringing  into  play,  as 
it  did,  a  greater  number  of  machine  guns  to  the  tactical  unit 
than  troops  had  ever  used  before,  focused  attention  upon  the 
machine  gun  equipment  of  our  own  Army.  For  many  years  the 
Ordnance  Bureau  had  been  studying  the  machine  gun  prob- 
lem. By  1916  the  developments  in  Europe  had  left  our  Army's 
machine  gun  progress  dangerously  far  back  in  the  rear.  Not 
only  was  the  Army's  equipment  scant,  in  comparison  to  what 
had  come  to  be  regarded  as  adequate  machine  gun  equipment 
for  troops,  but  the  guns  our  Army  was  using  were  obsolete  in 
design.  The  Lewis  machine  gun,  an  American  invention,  had 
won  a  spectacular  triumph  in  Europe.  Although  machine  guns 

*  The  Armies  of  Industry :  I. 


AUTHORS'  FOREWORD  xix 

had  been  in  existence  for  a  long  time  it  took  the  World  War 
to  demonstrate  their  tactical  importance  in  the  field.  Here  was 
a  modern  development,  then,  that  demanded  consideration. 

The  Secretary  of  War  appointed  a  special  machine  gun 
board,  consisting  of  seven  army,  navy,  and  marine  officers  and 
two  civilians,  to  investigate  the  whole  question.  The  board 
deliberated  in  the  fall  of  1916,  but  it  then  found  itself  unable 
to  fix  definitely  upon  types  and  designs  of  guns  to  be  adopted — 
for  reasons  too  technical  to  be  described  here,  the  Lewis  gun 
did  not  then  meet  with  the  board's  approval — and  so  it  an- 
nounced that  beginning  with  the  first  day  of  the  following  May 
(1917)  it  would  conduct  competitive  tests  of  machine  guns  at 
the  Springfield  Armory  at  Springfield,  Massachusetts.  This 
was  fair  notice  to  the  inventors  and  manufacturers  to  enable 
them  to  perfect  their  models  in  readiness  for  the  demonstration. 
It  is  probable  that  in  making  this  deferment  the  board  was 
aware  of  the  progress  then  being  made  by  John  M.  Browning, 
the  inventor,  and  that  the  date  for  the  tests  was  set  far  enough 
ahead  to  enable  him  to  be  present  with  working  models. 

At  any  rate,  on  May  i,  three  weeks  after  America  became 
a  belligerent,  the  machine  gun  tests  began.  Ten  days  later — 
although  under  the  published  conditions  the  tests  still  had  far 
to  go,  and  many  thousands  of  rounds  of  ammunition  remained 
yet  to  be  fired — two  of  the  members  of  the  board  left  Spring- 
field and  hurried  to  Washington.  They  carried  with  them  a 
preliminary  report,  concurred  in  unanimously  by  the  board, 
to  the  effect  that  Colonel  Browning  had  invented  a  weapon — 
his  heavy  machine  gun — which  was  in  advance  of  anything  the 
world  knew,  both  in  effectiveness  as  a  weapon  and  in  its  adapt- 
ability to  rapid  production.  The  report  urged  the  immediate 
adoption  and  procurement  of  the  gun  by  the  War  Department. 

We  were  already  in  the  war;  every  day's  delay  inferentially 
cost  lives  and  prolonged  the  national  peril;  and  the  machine 
gun  board  was  unwilling  to  risk  any  delay,  either  in  the  mails, 
or  in  the  usual  routine  of  the  War  Department.  And  so  it  took 
this  extraordinary  course  of  anticipating  its  own  certain  formal 
report  by  two  weeks  by  sending  on  these  two  officers  to  Wash- 


xx  AUTHORS'  FOREWORD 

ington  to  tell  the  War  Department  about  the  Browning  gun,  so 
that  the  Ordnance  Bureau  might  set  about  its  manufacture 
immediately.  The  preliminary  report  was  delivered  to  the 
Adjutant  General  on  May  11.  Next  day  the  two  officers  met 
the  Secretary  of  War  and  told  him  about  the  report.  Then 
they  went  back  to  Springfield. 

A  week  or  so  later  the  board  received  an  official  letter  in 
this  tenor:  "Don't  be  in  a  hurry.  Don't  get  excited.  Go  shoot 
the  gun  some  more."  For  all  the  mission  to  Washington  had 
accomplished,  the  officers  might  just  as  well  have  stayed  in 
Springfield.  There  was  no  immediate  action  in  the  War  De- 
partment. With  America  having  actually  clashed  with  the  foe 
at  sea,  with  hundreds  of  thousands  of  young  Americans  enlist- 
ing and  thus  actually  stepping  out  on  the  road  that  led  even- 
tually to  the  European  slaughter  pens,  the  War  Department 
took  no  effective  steps  to  provide  the  new  troops  with  Brown- 
ing machine  guns.  True,  in  July  the  Department  let  contracts 
for  the  production  of  22,000  Browning  guns  by  the  Colt's 
Patent  Firearms  Manufacturing  Company,  the  holder  of  the 
Browning  patents;  but  the  Colt's  Company  was  so  loaded 
with  other  machine  gun  contracts  that  it  was  in  no  posi- 
tion to  start  making  Brownings  until  it  had  provided  itself 
with  completely  new  facilities.  In  fact,  these  first  orders 
placed  with  the  Colt's  Company  may  be  disregarded  almost 
altogether,  since  neither  of  them  resulted  in  production  until 
after  production  had  started  under  the  later  contracts,  and, 
moreover,  the  production  of  Brownings  by  the  Colt's  Company 
was  always  small  and  negligible  compared  with  that  of  the 
other  producers. 

It  was  not  until  September  and  October,  1917,  that  our 
Browning  machine  gun  program  really  began,  when  contracts 
were  placed  for  the  manufacture  of  65,000  guns.  At  the  most 
favorable  calculation,  four  months — four  of  the  most  vital 
months  of  our  history — had  elapsed  since  the  head  of  the  War 
Department  had  been  apprised  of  the  great  value  of  the 
weapons.  As  a  result  of  this  delay  our  first  divisional  machine 
gun  companies  trained  with  obsolete  Benet-Mercies,  1904- 


AUTHORS'  FOREWORD  xxi 

model  Maxims,  and  old-fashioned  Colts.  In  France  our  troops 
fought  chiefly  with  Hotchkiss  heavy  machine  guns  and  Chau- 
chat  automatic  rifles.  Fortunately,  the  well-developed  muni- 
tions industries  of  the  Allies  were  able  to  supply  these. 

Yet  when  industry  was  permitted  to  start  the  manufacture 
of  Browning  guns,  what  a  record  it  made !  It  began  producing 
the  guns  in  quantity  in  May,  1918.  This  could  just  as  well 
have  been  January,  except  for  the  delay  in  the  War  Depart- 
ment. The  industry  produced  nearly  100,000  Browning  guns 
before  the  armistice,  reaching  the  production  rate  of  30,000 
guns  a  month.  It  sent  enough  Browning  guns  of  both  sorts  to 
France  to  arm  the  A.  E.  F.  completely,  but  the  A.  E.  F.  was  so 
busy  fighting  in  the  Argonne  that  it  had  no  time  to  exchange 
its  French  weapons  for  the  American  guns.  After  July  i,  1918, 
all  the  American  divisions  sailed  completely  equipped  with 
Browning  guns.  Had  the  manufacturing  program  been  inaugu- 
rated when  it  was  possible  to  inaugurate  it,  there  would  have 
been  Browning  guns  enough  to  arm  all  American  divisions 
embarking  after  March  i,  1918.  Three-fourths  of  the  A.  E.  F. 
embarked  after  that  date.  A  little  more  initiative  in  Washing- 
ton, and  the  Allies  might  have  been  relieved  almost  completely 
of  one  of  their  great  burdens  of  A.  E.  F.  supply. 

Think  not  that  we  are  selecting  an  isolated  example.  If  the 
authorities  in  Washington  knew  anything,  they  must  have 
known  at  the  beginning  of  our  participation  in  the  war  that 
the  forthcoming  American  armies  would  have  to  depend  for 
their  powder  and  explosives  almost  entirely  upon  new  and 
specially  created  manufacturing  facilities.  The  American 
powder-making  industry,  in  the  two  years  and  eight  months 
between  the  outbreak  of  the  war  in  Europe  and  our  declaration 
of  war  against  Germany,  had  expanded  in  producing  capacity 
three  thousand  per  cent — thirty  times.  This  was  almost  entirely 
in  response  to  war  orders  placed  in  the  United  States  by  the 
Allies.  It  is  therefore  evident  that  there  could  have  been  no  ex- 
cess producing  capacity  within  the  United  States  not  engaged 
in  turning  out  propellants  and  high  explosives  for  the  Allies.  It 
was  equally  evident  that  it  would  be  a  fatal  step  to  disturb  this 


xxii  AUTHORS'  FOREWORD 

supply  upon  which  the  Allies  were  basing  their  operations. 
Therefore  we  had  to  build  up  what  amounted  to  an  entirely 
new  powder  industry  in  this  country  in  order  to  satisfy  our 
own  tremendous  war  needs. 

It  was  obviously  an  efficient  thing  to  do,  instead  of  creating 
a  multitude  of  small  smokeless-powder  plants,  to  erect  and 
establish  one  huge  Betelgeuse  of  a  powder  plant,  strategically 
and  safely  located  behind  the  mountains,  to  which  we  could 
look  chiefly  for  the  powder  that  would  keep  our  field  guns 
vocal.  This,  at  any  rate,  was  the  opinion  of  the  experts,  civilian 
and  military,  who  were  studying  the  problem;  and  it  may  be 
assumed  that  such  a  vital  project  was  one  of  the  first  war 
measures  to  be  instituted  by  the  War  Department  after  the 
declaration  of  war. 

Such  an  assumption,  however,  would  be  wrong.  It  was 
months  before  the  Secretary  of  War  seriously  took  up  the 
project  for  consideration.  In  the  fall  of  1917  he  was  personally 
negotiating  with  the  DuPonts  for  the  erection  by  them  of  a 
great  powder  plant.  For  weeks  these  negotiations  dragged 
along,  the  Government  finding  itself  unable  to  make  satis- 
factory terms  with  the  DuPonts.  Then,  late  in  the  fall,  came 
the  Interallied  Ordnance  Agreement,  placing  upon  the  United 
States  the  obligation  to  furnish  to  the  Allies  an  immensely 
increased  supply  of  powder,  in  addition  to  what  they  were 
already  securing  on  their  American  orders ;  and  it  was  evident 
that  we  should  need  another  new  powder  plant  at  least  as  large 
as  the  one  in  contemplation. 

Not  until  December  17,  1917,  did  the  War  Department 
take  the  step  it  should  have  taken  long  before — namely,  it 
called  upon  an  expert  industrial  executive,  Mr.  D.  C.  Jack- 
ling,  to  take  charge  of  the  whole  construction  enterprise.  Mr. 
Jackling  justified  this  course  by  coming  to  a  quick  decision  as 
to  what  his  program  would  be.  As  Director  of  United  States 
Government  Explosives  Plants,  he  himself  built  the  plant  at 
Nitro,  West  Virginia,  engaging  the  constructing  contractors  on 
January  18,  1918,  a  few  days  after  he  took  up  his  duties; 
and  he  reached  an  early  agreement  with  the  DuPont  Engi- 


AUTHORS'  FOREWORD  xxiii 

neering  Company  to  build  the  other  great  plant,  that  at  Nash- 
ville. Thereafter  the  progress  was  amazing.  The  Nashville 
plant  actually  began  turning  out  powder  on  July  i,  1918,  and 
the  two  plants  before  the  armistice  reached  a  combined  produc- 
tion average  of  more  than  500,000  pounds  of  powder  daily,  or 
about  one- third  of  their  combined  projected  capacity.  The 
point  is,  however,  that  the  construction  of  these  plants,  the 
need  for  at  least  one  of  which  was  evident  in  the  spring  of 
1917,  did  not  begin  until  after  February  i,  1918;  and  then 
we  had  been  at  war  nearly  ten  months ! 

Now  these  and  other  distressing  delays  which  could  be 
named  were  not  due  to  the  failure  of  the  human  factor — not 
directly,  that  is.  There  was  no  lack  of  vigor  in  Washington, 
no  disagreement  as  to  the  necessity  for  swift  action,  and  no 
lack  of  technical  ability  about  which  we  can  complain.  The 
explanation  lay  in  a  more  subtle  thing,  in  the  grouping  and 
arrangement  of  powers  and  duties  which  we  know  as  organiza- 
tion. The  War  Department  was  trying  to  function  with  an 
organization  so  absurd  and  antiquated,  from  the  standpoint  of 
a  modern  business  man,  that  real  progress  was  practically 
impossible.  The  lack  of  good  organization  was  too  complete  to 
deserve  any  detailed  description. 

The  chief  weakness  in  the  organization  as  it  then  existed 
was  its  lack  of  an  efficient  overhead  control.  In  the  material 
side  of  warfare,  the  Department  existed  as  a  collection  of  semi- 
independent  purchasing  and  operating  bureaus,  each  regarding 
all  the  others  as  natural  competitors,  and  each  determined  to 
put  through  its  own  projects,  if  necessary,  at  the  expense  of 
the  others.  The  impossibility  of  that  system  had  been  notori- 
ously demonstrated  during  the  Spanish-American  War,  when 
the  army  supply  system  broke  down  almost  completely.  Yet  on 
the  same  old  plan  the  War  Department  had  existed  during  the 
nineteen  years  which  had  intervened  up  to  the  declaration  of 
war  in  1917. 

The  Navy  had  seen  the  light,  and  it  had  consolidated  its 
procurement  of  supplies  some  time  before  we  engaged  in  the 


xxiv  AUTHORS'  FOREWORD 

war.  A  comparison  of  the  early  procurement  activities  of  the 
Army  and  Navy  conveys  a  plain  lesson. 

The  Navy  changed  its  organization  in  time.  The  War  De- 
partment approached  the  brink  of  war,  and  stepped  over  into 
it,  without  having  made  the  first  attempt  to  correct  its  faulty 
organization;  and  since  that  organization  itself  was  respon- 
sible for  most  of  the  delay  in  the  manufacturing  program 
which  occurred  later,  those  who  either  did  not  recognize  the 
deficiencies  of  the  organization,  or  else  lacked  the  ability  to 
change  it,  must  now  themselves  bear  the  responsibility  for  the 
shortcomings  in  the  production  and  delivery  of  supplies.  Cer- 
tainly American  industry  cannot  be  blamed  because  its  chief 
war  customer,  the  War  Department,  was  unable  for  months  to 
set  its  own  house  in  order. 

When  the  independent  bureaus  of  the  War  Department 
went  on  a  war  footing  in  April,  1917,  they  began  their  work 
with  an  energy  for  which  there  is  here  nothing  but  commenda- 
tion. Their  energy  itself,  however,  soon  got  them  into  trouble. 
It  was  not  so  much  that  the  energy  was  misdirected  as  that  it 
was  undirected,  and  presently  the  result  was  confusion  worse 
confounded.  There  was  no  harmony  among  the  various  indus- 
trial projects,  no  equitable  division  of  manufacturing  facilities 
and  materials,  no  uniformity  in  contracts  or  in  treatment  of 
labor  and  industry,  no  care  to  prevent  the  overloading  of  indi- 
vidual factories  with  war  work  or  to  guard  against  the  conges- 
tion of  manufacturing  districts;  and  presently  war  industry 
approached  a  condition  resembling  chaos.  Even  the  transporta- 
tion congestion  which  almost  paralyzed  the  railroads  and  led 
to  their  seizure  by  the  Government  on  December  28,  1917,  was 
due  largely  to  the  uncoordinated  and  undirected  shipment  of 
war  materials. 

In  January,  1918,  the  Hon.  George  E.  Chamberlain,  then 
the  chairman  of  the  United  States  Senate  Committee  on  Mili- 
tary Affairs,  addressing  the  National  Security  League  in  New 
York,  made  the  statement  that  "the  Military  Establishment  of 
America  has  .  .  .  almost  stopped  functioning."  This  address 
confirmed  the  general  public  suspicion  that  the  supply  program 


AUTHORS'  FOREWORD  xxv 

was  not  going  well ;  and,  coming  as  the  first  severe  attack  upon 
the  War  Government,  it  created  a  sensation.  The  high  officials 
immediately  responsible  for  the  condition  of  war  industry  did 
not  take  the  attack  in  good  spirit.  The  White  House  lightnings 
descended  upon  Senator  Chamberlain's  head,  when  the  Presi- 
dent issued  a  statement  which  began  with  the  sentence :  "Sena- 
tor Chamberlain's  statement  as  to  the  present  inaction  and 
ineffectiveness  of  the  Government  is  an  astonishing  and  abso- 
lutely unjustifiable  distortion  of  the  truth." 

In  extenuation  of  the  President's  intemperateness  of  expres- 
sion and  the  method  of  his  attack,  it  should  be  remembered  that 
this  verbal  passage  occurred  at  a  time  when  the  Administration 
was  laboring  under  great  stress.  A  certain  irritability  perhaps 
could  be  excused.  The  Senator  in  his  address  had  not  been  care- 
ful of  his  terminology  and  had  spoken  loosely  of  the  Govern- 
ment and  the  Military  Establishment  when  he  meant  the  much 
narrower  administration  of  the  production  of  army  supplies. 
Still,  nobody  could  have  heard  or  read  his  speech  and  mistaken 
his  meaning.  The  War  Government  generally  was  accomplish- 
ing great  things,  and  there  could  have  been  no  severe  criticism 
of  the  way  in  which  the  Military  Establishment  was  building 
up  its  human  power  and  conducting  many  other  important 
operations  of  war.  The  President,  however,  chose  to  take  Sena- 
tor Chamberlain  literally  and  therefore  was  able  to  deliver  an 
attack  to  which  there  could  be  no  convincing  rejoinder. 

It  was  the  natural  instinct  of  the  Administration  at  that 
time  to  defend  itself  vigorously  against  criticism,  an  instinct 
happily  at  the  moment  strengthened  by  the  fact  that  brighter 
days  were  apparently  at  hand.  The  War  Department  in  its 
supply  activities  had  indeed  almost  ceased  to  function,  as 
Senator  Chamberlain  charged;  but  what  he  did  not  mention, 
if  indeed  he  knew  of  it  at  all,  was  that  already  the  reorganiza- 
tion had  begun  which  was  to  bring  order  out  of  chaos  in  the 
production  of  supplies.  The  plans  for  reorganization  had  al- 
ready been  formulated,  and  the  first  steps  were  being  taken  to 
put  them  into  effect.  Senator  Chamberlain's  speech  accom- 
plished the  beneficial  result  of  speeding  the  reorganization, 


xxvi  AUTHORS'  FOREWORD 

which  nevertheless  had  to  proceed  gradually,  because  it  was 
also  necessary  to  keep  the  War  Department's  business  going 
and  therefore  impossible  to  stop  dead  while  conducting  a 
reorganization. 

As  the  new  organization  evolved  from  the  old,  and  ex- 
panded, and  strengthened  its  authority  and  control  over  the 
situation,  the  war  industry  responded  as  a  parched  country 
responds  to  a  drought-breaking  rain.  The  development  of 
facilities  in  the  ten  war  months  of  1918,  the  growth  of  plans 
and  programs,  and  even  the  records  of  actual  production,  were 
an  inspiration — a  thing  truly  worthy  of  the  industrial  great- 
ness of  America,  a  thing  beyond  comparison  with  any  other 
national  public  work.  American  war  industry,  finally  un- 
shackled, demonstrated  that  within  itself  it  possessed  the 
power  of  miracles  for  which  Europe  was  looking.  It  did  not 
fail — far  from  it — and  those  who  assert  the  contrary  do  not 
see  the  whole  truth ;  they  lack  the  measuring  rod.  Our  tremen- 
dous manufacturing  enterprises  of  1918  undoubtedly  had  great 
moral  effect  in  bringing  the  war  to  an  early  conclusion,  for 
those  enterprises  were  being  developed  on  a  scale  which  the 
enemy  had  no  hope  of  equaling,  as  he  was  well  aware.  That 
their  physical  effect  in  the  field  was  not  greater  was  due  to  the 
conditions  under  which  the  war  industry  labored  at  the  outset, 
conditions  due  to  no  failure  of  industry  itself,  or  to  no  failure 
of  individual  officers,  but  to  a  failure  of  an  obsolete,  unwork- 
able organization  at  the  top.  And  it  is  necessary  to  add  that 
behind  this  failure  was  the  failure  of  those  responsible  to 
recognize  and  correct  the  organizational  defects  patent  to  so 
many  both  inside  and  outside  the  War  Department. 

This  criticism  is  here  set  down,  not  for  its  own  sake,  not  in 
any  captious  or  vindictive  spirit,  but  for  the  sake  of  truth 
and  the  enduring  fame  of  our  war  industry.  The  war  is  over, 
and  we  are  now  far  enough  away  from  it  to  see  some  of  its 
verities.  The  volumes  to  which  these  paragraphs  are  prefatory- 
have  been  written  in  the  hope  that  they  will  prove  to  be  a 
useful  contribution  to  the  literature  of  military  preparedness. 
They  have  not  been  written  to  justify  any  man  or  any  insti- 


AUTHORS'  FOREWORD  xxvii 

tution,  or  to  blame  any  individual  or  any  system,  but  to  show 
the  truth  as  nearly  as  the  authors  could  approximate  it  in 
dealing  with  a  subject  so  vast  as  that  of  our  war  industry. 
Only  by  having  access  to  the  truth  can  those  of  the  future 
avoid  our  mistakes.  Former  wars  left  us  no  such  records  on 
which  to  base  our  industrial  plans  in  1917.  The  mobilization 
of  industry  for  war  was  terra  incognita  to  the  Government 
and,  it  should  be  added,  to  the  producers  also.  For  the  weal  of 
America  it  is  important  that  in  the  future,  when  the  memories 
of  the  World  War  are  dim,  but  when  some  other  emergency 
may  demand  the  employment  of  our  whole  resources  for  war, 
there  be  no  repetition  of  the  painful  exploration  and  experi- 
ment of  1917.  In  the  hope,  therefore,  that  they  are  providing 
an  aid  not  only  for  the  military  student  but  for  the  industrial 
producer  also,  to  show  them  what  a  great  war  means  to  the 
industry  of  a  nation  such  as  ours  and  to  enable  them  both  to 
avoid  past  mistakes  and  to  build  solidly  and  well,  the  authors 
have  done  their  work. 

B.  C.  &  R.  F.  W. 
Washington,  February,  1921. 


PREFACE 

THE  period  of  greatest  effectiveness  on  the  part  of  the 
War  Industries  Board  roughly  coincides  with  the 
period  of  greatest  progress  in  the  production  of  mili- 
tary munitions.  This  was  no  accident :  the  one  was  cause,  the 
other  effect.  The  direction  and  control  of  all  war  industry  by 
a  single  authority  was  found  by  hard  experience  to  be  a  condi- 
tion precedent  to  the  efficient  employment  of  that  industry  in 
the  production  of  military  supplies.  The  War  Department, 
being  only  one  of  the  official  customers  of  that  industry,  was 
in  no  better  position  to  apply  the  control  than  the  Navy  was, 
or  the  United  States  Shipping  Board,  or  the  Purchasing  Com- 
mission for  the  Allies.  It  remained  for  some  outside  and  supe- 
rior agency  to  assume  such  powers;  and  such  an  agency  was 
found  in  the  War  Industries  Board,  the  saving  force  which, 
coming  into  war  industry  in  1918,  enabled  it  to  accomplish 
what  it  did  accomplish. 

All  the  volumes  of  this  series,  except  this  volume,  are  con- 
cerned primarily  with  activities  most  of  which  fell  within  the 
administrative  province  of  the  Assistant  Secretary  of  War  and 
Director  of  Munitions.  But  no  record  of  the  conduct  and 
achievements  of  the  industrial  effort  of  the  War  Department 
is  complete  unless  it  tells  something  about  the  administration 
of  industry  as  a  whole.  As  long  as  industry  itself  was  confused, 
the  War  Department's  own  material  enterprises  could  not  hope 
to  escape  the  confusion.  The  inclusion,  therefore,  of  this  annal 
of  the  work  of  the  War  Industries  Board  in  a  series  of  volumes 
otherwise  almost  entirely  devoted  to  intra-departmental  affairs 
of  the  War  Department,  is  to  be  regarded  as  an  acknowledg- 
ment of  the  War  Department's  debt  to  the  War  Industries 
Board. 

The  thanks  of  the  authors  are  due  to  those  members  of  the 


xxx  PREFACE 

War  Industries  Board  who  so  freely  contributed  their  time  in 
connection  with  the  preparation  of  this  volume  and  who  gave 
the  benefit  of  their  advice  in  its  final  revision.  Special  acknowl- 
edgment is  due  to  Mr.  C.  H.  Claudy,  who  literally  spent 
months  of  his  time  in  collecting  and  arranging  the  material. 


THE  GIANT  HAND 


CHAPTER  I 
THE  CONTROL  OF  WAR  INDUSTRY 

WAR  industry  in  1917-1919  was  something  more 
than  war  department  industry.  War  industry  was 
the  whole:  war  department  industry  but  a  part, 
albeit  much  the  largest  of  the  parts.  In  a  real  sense  the  whole 
enormous  activity  of  shipbuilding  was  war  industry.  The  Navy 
also  prosecuted  a  large  war  industry.  Its  contracts  brought 
forth  destroyers,  submarine  chasers,  guns,  powder  and  shell, 
depth  charges,  mines,  airplanes,  as  well  as  food  and  clothing 
for  the  hundreds  of  thousands  of  American  boys  who  wore  the 
blue  uniform.  A  fourth  branch  of  American  war  industry  was 
that  conducted  by  the  Allies,  represented  in  America  by  pur- 
chasing commissions.  For  them  the  windows  of  dozens  of 
American  factories  blazed  through  the  nights,  and  thousands 
of  American  workmen  toiled  until  the  armistice  came  to  halt 
all  such  enterprises.  But  we  went  even  farther  back  into  funda- 
mentals, and  by  encouragement  and  control  made  war  indus- 
try of  such  basic  pursuits  as  the  mining  of  coal  and  the 
production  of  food. 

Truth  to  tell,  all  American  industry  in  1918,  when  the 
great  war  program  was  well  advanced,  was  war  industry.  Not 
all  of  it  was  producing  the  things  used  in  war;  but  even  that 
fraction  of  it  which  still  retained  some  semblance  of  its  normal 
aspect  led  such  a  rationed  and  controlled  existence  that  it  may 
verily  be  considered  as  part  of  the  war  machine. 

Now  the  War  Department,  with  whose  industrial  efforts 
this  series  of  narratives  is  principally  concerned,  bore  to  the 
great  industrial  structure  of  America  the  relationship  of  cus- 
tomer— the  largest  customer.  The  war  industries  of  the  United 


2  THE  GIANT  HAND 

States  Shipping  Board,  the  Navy  Department,  and  the  Allies 
in  America,  lumped  together,  would  not  have  equaled  in 
quantity  the  commitments  of  the  War  Department  alone. 
For  the  War  Department  more  workmen  toiled  than  for  all 
the  others  combined;  greater  and  more  numerous  were  the 
problems  which  arose;  more  the  materials  involved,  and  more 
the  money.  But  the  Navy,  the  Shipping  Board,  and  the  others 
were  customers,  too,  and  important  ones.  All  had  to  be  served, 
if  the  whole  effort  were  not  to  come  to  disaster ;  and  there  was 
not  sufficient  industrial  capacity  within  the  United  States  to 
take  care  of  all  the  customers'  demands.  Therefore,  if  the  best 
organized  and  most  efficient  of  the  customers  were  not  to 
serve  themselves  to  the  war  materials  first,  at  the  expense  of 
the  others  (who  were  equally  vital  in  the  strategy  of  the 
nation),  there  had  to  be  a  manager  of  the  plant — someone 
who  would  see  to  it  that  all  the  customers  had  equitable  access 
to  the  facilities,  and  who  would  at  the  same  time  look  to  the 
development  and  expansion  of  facilities,  so  that  the  resources 
of  the  United  States  might  do  their  utmost  toward  satisfy- 
ing all  the  war  needs.  And  since  the  plant  was  the  whole 
sum  of  American  industry,  with  its  diverse  ownership  and 
management,  this  supercontrol  had  to  be  Government  itself, 
which  in  its  branches  was  itself  the  customer. 

It  is  with  this  control  and  the  agency  of  control,  the  War 
Industries  Board,  with  the  development  of  its  power  until 
it  became  the  single  most  powerful  administrative  agency  in 
our  Government,  if  not  in  any  government,  and  with  the 
acts  which  demonstrated  that  power — acts  which  mobilized 
the  resources  of  the  United  States  for  war — that  the  narra- 
tive in  this  volume  deals. 

Preparedness*?  Who  in  America  before  1914,  and  for  a  long 
time  after  that,  thought  of  it  in  terms  of  materials^  Prepared- 
ness, we  Americans  thought,  was  a  matter  of  men  and  their 
training  as  soldiers.  Who  in  those  days  supposed  that  the 
training  of  troops  was  but  the  minor  and  less  difficult  side  of 
preparation  for  war  and  that  the  crux  of  the  struggle  for 
battle  power  was  not  soldiers,  but  the  materials  of  warfare — 


THE  CONTROL  OF  WAR  INDUSTRY     3 

not  the  mobilization  of  men,  but  the  mobilization  of  ores  and 
fuels,  the  muster  of  mechanics  and  machine  tools'?  Certainly 
the  people  of  the  United  States  are  not  to  be  blamed  for  their 
lack  of  understanding  of  the  problem  of  modern  warfare; 
for  the  people's  own  experts  in  warfare,  the  pick  of  the  West 
Point  graduates,  who  made  special  studies  of  the  subject  at 
the  Army  War  College,  failed  to  make,  in  their  multifold 
calculations  of  strategy,  provision  for  the  mobilization  of  war 
industry.  The  war  broke  out  in  Europe;  and  still,  as  the  Ger- 
man inundation  overwhelmed  Belgium  and  swept  onward  into 
France,  it  seemed  that  soldiers  were  the  thing,  as  they  had 
always  been  in  the  past. 

Then  something  happened.  The  opposing  forces  struck 
equilibrium,  deadlocked,  dug  in;  trench  warfare  began.  And 
now  a  new  element  made  itself  felt:  the  insensate  power  of 
materials.  A  feverish  invention  in  Europe  began  to  apply  the 
principle  of  the  labor-saving  machine  to  warfare;  and  it  be- 
came more  and  more  evident  (with  still  and  always  some- 
thing to  be  said  for  superiority  in  numbers  of  troops)  that 
victory  was  likely  to  rest  with  the  side  that  could  mobilize 
the  greater  weight  of  materials. 

This  realization  was  not  with  us — not  then.  We  were  three 
thousand  miles  away  from  the  war  and  observers  of  only  the 
superficial  aspects  of  it — the  inconsequential  gains  and  losses 
of  salients,  the  individual  exploits,  the  suffering  of  civilian 
populations.  The  first  inklings  of  what  was  toward  occurred 
when  the  principal  Allies,  having  in  their  plans  exhausted 
their  own  productive  resources,  turned  to  the  resources  of 
America  with  money  to  purchase  their  mobilization.  The  first 
American  munitions  factories  sprang  up,  the  beginnings  of  war 
industry  were  to  be  seen  in  the  United  States,  the  war-bride 
corporation  wrote  unbelievable  quotations  upon  the  ticker 
tape,  the  public  gossip  rolled  upon  its  tongue  the  glittering 
romances  of  the  stock  exchange.  After  some  months  of  this  a 
few  long-visioned  Americans — engineers  for  the  most  part, 
men  who  knew  something  about  American  industry — began 
to  understand  what  would  be  our  difficulty  if  we  were  drawn 


4  THE  GIANT  HAND 

into  the  struggle  as  a  belligerent.  The  travail  in  Europe,  as 
the  Allies  attempted  the  mobilization  of  their  industrial  re- 
sources, was  patent  in  the  downfall  of  statesmen  and  minis- 
tries, in  the  extraordinary  powers  usurped  by  government 
there.  Compared  with  ours,  their  individual  problems  were 
almost  elementary.  What  would  be  the  result  if  we  were 
forced  suddenly,  on  the  moment,  to  mobilize  our  industry  for 
war,  as  war  had  now  come  to  be — to  mobilize  our  vastly 
greater,  more  diverse  and  complex,  less  homogeneous,  and 
more  widely  scattered  industry? 

Some  few  Americans  appreciated  the  problem  and  the  neces- 
sity of  its  solution  as  a  measure  in  preparedness.  Certain 
thoughtful  leaders  of  industry  knew  it.  As  early  as  1915  the 
Chamber  of  Commerce  of  the  United  States  formed  its  Com- 
mittee on  National  Defense,  which  had  for  its  purpose  the 
surveying  and  lining  up  of  the  factories  of  America  into  a 
potential  war  industry.  As  to  the  American  public,  it  relied 
upon  the  Government  to  keep  out  of  Europe's  war  altogether, 
and  as  a  body  it  was  impatient  of  the  calamity  howlers.  Alas, 
nowhere  in  the  various  branches  of  the  Government  was  there 
a  leadership  which  saw  the  necessity  of  making  industrial 
preparation  a  major  official  activity,  if  merely  as  insurance 
against  the  failure  of  a  precarious  foreign  policy.  The  hand- 
ful of  clear-sighted  men  succeeded  in  gaining  some  sort  of 
concession  from  the  Government.  Congress  appropriated  a 
few  thousands — gave  the  alarmists  a  dessert  spoon  with  which 
to  shovel  down  Pike's  Peak — and  thereafter  (it  was  the 
autumn  of  1916)  was  to  be  observed  the  spectacle  of  Howard 
E.  Coffin,  pioneer  of  American  industrial  preparedness,  and 
a  handful  of  assistants  trying,  if  not  to  mobilize,  at  any  rate 
to  take  an  inventory  of,  the  facilities  we  should  have  to  work 
with  if  the  need  came.  A  brave  and  pathetic  sight,  a  pinch  of 
star  dust  amid  the  serene  planets  and  dead  worlds  that  swam 
the  Washington  cosmos. 

It  may  be  said  with  truth  that  Washington  never  clearly 
envisaged  the  magnitude  of  the  problem  of  mobilizing  our  war 
industry  until  we  had  been  for  several  months  a  belligerent. 


Photo  by  Harris  6?  Ewing 


HOWARD  E.  COFFIN 


THE  CONTROL  OF  WAR  INDUSTRY     5 

The  first  conception  of  our  part  in  the  war  was  that  we  were  to 
give  financial  and  industrial  aid  to  the  Allies,  and  for  the  rest 
to  form  a  sort  of  cheering  section  on  the  side  lines.  Later  it  was 
borne  in  upon  American  understanding  that  we  should  have  to 
send  men  to  fight;  but  still,  though  the  supply  problem  was 
now  rearing  its  terrifying  head  in  the  confused  bureaus  in 
Washington,  there  was  no  general  understanding  of  the  fact 
that  the  war  was  for  us,  not  only  an  affair  of  men  in  uniform, 
but  also  and  above  all  an  affair  of  business  and  industry,  of 
forests  and  mines  and  oil  wells,  of  cotton  fields  and  hay  fields, 
of  cows  and  hides,  of  huge  mushrooming  factories,  of  designs 
and  specifications,  of  machine  tools,  dies,  jigs  and  gauges,  of 
mechanics  and  laborers,  of  ships,  electric  wires,  shoe  leather, 
needles,  and  thread.  Not  until  the  summer  of  1917  did  the 
Government  come  to  realize  the  supreme  difficulty  of  welding 
our  industry  into  a  single  ordered  unit  and  the  supreme  neces- 
sity of  government  control  of  it.  Up  to  that  time  the  mobiliza- 
tion had  been  in  the  hands  of  a  large,  rapidly  expanding,  and 
increasingly  important,  but  nevertheless  volunteer,  organiza- 
tion, the  powers  of  which  were  only  advisory.  Then  at  last 
were  taken  the  steps  toward  complete  governmental  control 
of  industry.  Even  then,  that  control  did  not  emerge  completely 
from  the  flux  of  organization  until  the  spring  of  1918,  when 
our  war  was  a  year  old ! 

Nevertheless,  it  did  emerge.  Industry  came  under  complete 
control.  The  germ  in  the  office  of  those  precursors  in  1916, 
feebly  trying  with  their  questionnaires  to  align  the  munitions- 
making  facilities  of  the  United  States  into  a  unit  organization, 
grew,  evolved,  and  flowered  into  the  power  that  was  the  War 
Industries  Board,  from  whose  authority  no  man,  however 
obscurely  connected  with  the  great  fabric  called  industry,  was 
exempt.  With  the  possible  exception  of  Germany,  America 
became,  of  all  nations  at  war,  the  most  thoroughly  ordered 
and  controlled. 

In  this  there  is  a  paradox.  America  believes  herself  the 
freest  of  nations.  She  pictures  the  European  immigrant  as 
figuratively  kissing  her  free  soil  as  he  sets  foot  on  it.  Whether 


6  THE  GIANT  HAND 

we  have  a  greater  degree  of  liberty  than  the  more  advanced  of 
the  European  nations  is  beside  the  point;  the  belief  is  all  that 
counts;  and,  Americans  believing  as  they  do,  it  might  have 
been  expected  that  it  would  be  surpassingly  difficult  to  wrest 
from  them  their  individual  liberties,  even  to  the  end  that  we 
might  win  a  victory  in  war.  Free  speech,  a  free  press,  personal 
rights — these  are  American  institutions.  With  us,  as  in  Eng- 
land, every  man's  house  is  his  castle.  Every  man's  business  is 
his  own  affair.  Interferences  with  individual  businesses  are 
fiercely  resisted,  whether  those  interferences  be  governmental 
or  private.  The  various  anti-trust  acts  are  monuments  to  the 
American  determination  that  there  shall  be  no  interference 
with  individualistic  effort.  Business,  which  had  won  an  em- 
pire from  a  wilderness  and  had  brought  luxury  within  the 
reach  of  all,  was  protected. 

Yet,  once  we  were  in  the  war,  the  liberties  speedily  disap- 
peared, and  there  was  little  or  no  opposition  to  their  going. 
The  rights  of  the  individual  were  first  to  vanish.  With  the 
passage  of  the  Selective  Service  Act,  American  manhood  sur- 
rendered its  freedom.  After  that  law  was  in  effect,  no  man 
within  the  draft  age  was  any  longer  a  free  agent.  He  could  not 
come  or  go  without  permission  from  Government,  and  he  was 
required  to  hold  himself  ready  to  perform  whatsoever  service 
the  Government  chose  to  exact  of  him.  After  that  in  quick 
succession  disappeared  freedom  of  speech  and  freedom  of  the 
press,  the  latter  more  or  less  voluntarily.  Contrast  this  quick 
conscription  of  the  population  with  the  struggle  that  ensued  in 
England  before  compulsory  military  service  became  a  fact 
there.  Last  to  disappear  were  the  liberties  of  American  indus- 
try. Although  it  is  probably  true  that  in  America  any  invasion 
of  property  rights  is  more  doggedly  combated  than  an  inva- 
sion of  human  rights  (because  property  is  more  powerfully 
organized  than  humanity),  yet  this  delay  in  the  conscription  of 
business  was  due,  not  to  the  resistance  of  business  itself,  but 
to  the  disorganization  in  Washington  and  the  lack  of  govern- 
mental machinery  which  could  exercise  control. 

American   adaptability,   American   submissiveness   to  wise 


THE  CONTROL  OF  WAR  INDUSTRY     7 

leadership — in  the  last  analysis,  American  intelligence  and  a 
proud  patriotism — made  possible  these  sacrifices  of  liberty 
which  so  vastly  strengthened  the  arm  of  the  Government  in 
the  war.  What  Americans  granted  by  a  sort  of  common  con- 
sent was  won  by  the  governments  of  other  lands  from  their 
peoples  only  after  hard  struggles ;  yet  no  other  country  at  war 
with  the  Central  Powers  came  so  thoroughly  under  centralized 
control  as  free,  individualistic  America. 

As  to  the  control  of  American  business,  it  became  absolute. 
There  was  no  freedom  of  individual  enterprise.  The  control 
was  autocratic,  as  powerful  as  any  which  ever  reigned  in  the 
Russia  of  the  Romanoffs  or  in  Prussia  when  her  junkers  drank 
to  Der  Tag.  Indeed,  the  control  of  industry  did  not  end  at 
the  confines  of  America,  but  toward  the  close  of  the  war  was 
reaching  out  in  the  attempt  to  dominate  the  industrial  strategy 
everywhere  behind  the  Allied  lines,  as  General  Foch  dominated 
the  strategy  on  the  lines. 

Incredible*?  It  was  true.  Half  a  dozen  men  in  Washington — 
assistant  Presidents  they  were  in  reality,  for  they  administered 
the  practically  limitless  powers  granted  to  the  President  by 
Congress — sat  with  their  hands  on  the  levers  which  absolutely 
controlled  every  factory,  plant,  mine,  oil  well,  and  railroad  in 
all  America.  One  of  these  men,  Bernard  M.  Baruch,  a  civilian, 
guided  the  destinies  of  the  War  Industries  Board,  clothed 
with  a  power  the  limits  of  which  were  never  clearly  defined, 
and  which  therefore,  because  they  were  never  questioned,  ex- 
tended as  far  in  every  direction  as  he  found  it  necessary  to 
extend  them.  True,  in  his  acts  he  was  responsible  to  his  com- 
mander-in-chief  and,  more  fundamentally,  to  Congress,  the 
source  of  the  power.  But  Congress  was  backing  the  President 
almost  without  reservation;  and  as  to  President  Wilson,  once 
he  picked  a  man  for  a  high  place  and  reposed  confidence  in 
him,  he  trusted  him  unreservedly  and  interfered  with  him 
almost  never. 

The  control  extended  by  the  War  Industries  Board,  when 
it  had  thoroughly  organized  itself  for  the  effort,  was  absolute. 
In  a  business  way,  men  lived  or  died  at  a  word  from  Washing- 


8  THE  GIANT  HAND 

ton;  and  the  casualty  lists  were  sometimes  heavy.  Factories 
rose  or  fell,  prospered  or  perished,  as  the  War  Industries 
Board  commanded.  Labor  moved  and  worked  in  response  to 
the  wishes  of  the  Government.  Prices  no  longer  followed  the 
law  of  supply  and  demand :  they  advanced,  retreated,  or  stood 
still,  on  fiat  from  Washington.  To  its  own  laws,  the  laws  pre- 
venting combinations  and  business  interferences,  the  Govern- 
ment paid  no  more  attention  than  to  so  many  scraps  of  paper. 
Did  the  power  actually  exist  in  law  to  justify  the  more  drastic 
of  these  acts?  Those  wielding  the  power  assumed  that  it  was 
implied  in  the  broad  general  authority  given  to  the  President 
to  win  the  war  by  whatsoever  measures  his  judgment  recom- 
mended to  him;  and  those  affected  by  the  War  Industries 
Board's  fiat  never  questioned  the  authority — there  was  not 
the  rush  into  courts  for  interpretations  that  is  the  normal 
sequel  when  Business  deems  itself  constrained. 

The  need  of  the  Government  was  great,  its  appeal  strong, 
the  powers  it  assumed  were  enormous;  and  the  response  of 
Business  in  supplying  the  men  to  wield  the  powers  was  corre- 
spondingly fine.  Men  came  to  Washington  to  argue  and 
protest,  but  they  remained  to  labor  with  enthusiasm.  Men 
whose  services  could  not  have  been  procured  for  any  salaries 
within  the  Government's  command,  if  the  enterprise  had  been 
conducted  on  the  dollar  basis,  slaved  away  without  thought 
of  strength  or  health,  for  a  dollar  a  twelvemonth,  and  counted 
it  a  privilege. 

And  indeed  it  was  a  privilege.  Waste  no  tears  upon  the  sac- 
rifices of  the  dollar-a-year  men — ecstasies  enough  have  already 
been  poured  forth  in  their  praise.  America  deludes  herself  with 
a  false  reputation  for  materialism,  as  she  has  certainly  suc- 
ceeded in  deluding  Europe.  At  heart  she  preserves  a  childlike 
and  superb  idealism.  It  is  not  the  goal  of  dollars  that  keeps  the 
national  chase  at  frantic  pitch,  but  the  game  itself  of  getting 
there ;  and  the  dollars  at  the  end  represent  not  a  miser's  hoard, 
but  power,  applause,  celebrity — but  mostly  power.  Conceive 
of  the  most  ruthless,  materialistic  American  imaginable,  well 
on  his  triumphant  way  toward  conquering  some  important 


THE  CONTROL  OF  WAR  INDUSTRY     9 

branch  of  industry.  Go  to  him  in  the  prime  of  his  life  and  ask 
him  to  step  out  of  the  struggle  and  accept  the  Presidency  of 
the  United  States;  and  see  how  long  he  hesitates.  The  crass 
exhibitions  of  materialism  in  this  country  which  so  shock  our 
idealists — the  domination  of  Business  over  education,  current 
literature,  art,  the  stage,  social  intercourse — are  but  the  ex- 
pressions of  an  ideal  of  upward  struggle  and  power  which  we 
inherit  directly  from  the  pioneers  who  with  axe  and  rifle 
blazed  the  first  trails.  There  is  no  denying  America's  youth- 
fulness  still,  and  youth  is  crude.  America's  youthfulness  finds 
expression  in  the  fact  that  the  road  to  wealth  in  the  United 
States  is  one  of  the  great  highroads  to  power,  toward  which 
all  men,  feebly  or  with  might,  make  their  struggle. 

Moralists  during  the  recent  war  were  fond  of  alluding  to 
the  thinness  of  the  veneer  of  civilization  which  the  centuries 
of  organized  society  had  deposited  upon  man's  innate  savagery. 
Analogously,  it  needed  only  the  scratch  of  war  to  reveal  the 
implicit  idealism  of  America.  Americans,  practically  as  a  body, 
could  do  because  of  their  ideals  the  things  which  had  to  be 
coerced  by  law  from  the  populations  of  other  belligerents.  The 
two  million  Americans  who  fought  in  France  went  there  in 
the  spirit  of  Galahad,  crusading  to  end  wars  forever.  And 
when  the  real  test  of  national  motives  came — at  the  Peace 
Conference — what  was  the  one  nation  that  disdained  all 
material  gain  from  the  common  victory1?  If  in  the  settlement 
the  American  delegates  had  sought  to  aggrandize  America  with 
lands  and  spheres  of  influence,  such  an  act  would  have  raised 
in  the  United  States  a  whirlwind  of  indignant  repudiation. 

And  so  the  dollar-a-year  men  were  but  another  refutation 
of  the  lie  that  America  has  the  soul  of  a  trafficker.  With  them, 
no  doubt,  the  idea  of  their  material  sacrifice  was  uppermost; 
for  how  otherwise  could  they  gain  the  assurance,  so  necessary 
to  so  many  conscientious  non-combatants,  that  they  on  this  side 
were  to  some  extent  balancing  the  greater  sacrifice  of  the 
dollar-a-day  men  in  France"?  Yet  there  were  great  compensa- 
tions for  service  in  the  War  Government,  even  at  a  dollar  a 
year.  In  the  first  place  there  was  power — greater  power,  as  a 


10  THE  GIANT  HAND 

rule,  than  most  of  those  who  served  could  ever  hope  to  wield 
in  private  life.  Above  all  they  tasted  the  joy  of  being  impor- 
tant players  in  the  game  of  subduing  a  terrible  force  that  had 
defied  the  rest  of  the  world  for  three  years.  Was  that  worth 
nothing*?  Was  it  all  sacrifice  on  their  part,  all  acceptance  and 
no  giving  on  the  part  of  the  Government'?  There  was  scarcely 
one  of  them  who  would  not  have  paid  handsomely  for  serv- 
ing where  he  did,  and  not  one  who  was  not  the  envy  of  every 
outsider  who  camped  in  Washington  and  pleaded  and  de- 
manded that  he,  too,  be  placed  in  the  war  machine. 

Once  these  men  took  the  oath  of  office,  they  became  no 
longer  business  men  with  private  interests  but  agents  of  the 
Government,  capable  of  regarding  all  business,  their  own 
included,  with  the  impartial  eyes  of  outsiders.  If  the  delicately 
poised  structure  of  business  practice  in  any  industry  needed 
to  be  dragged  down  before  the  Government's  need,  their 
shoulders  were  stoutly  thrust  against  the  supporting  columns, 
even  though  they  themselves  had  helped  to  erect  them  in  the 
first  place. 

Business  itself,  at  first  suspicious  and  even  unwilling  to 
change  its  mode  at  the  behest  of  the  Government,  at  length 
came  around  to  the  other  point  of  view  and  willingly  enlisted 
itself  as  government  industry.  This  was  a  remarkable  thing — 
it  might  so  easily  have  been  otherwise.  Government  with  us 
rests  upon  the  consent  of  the  governed ;  but,  although  business 
was  not  consulted  in  the  arrangements  which  led  to  its  con- 
trol, it  consented  to  the  control,  even  cooperated  to  make  the 
control  more  effective,  once  it  had  seen  the  light.  Had  it  re- 
sisted, a  different  story  might  have  been  told.  It  was  this 
cooperation  which  enabled  the  war  industry  to  accomplish 
the  wonders  with  which  it  is  to  be  credited. 

It  was  evident  after  a  brief  trial  that  all  the  mines,  forests, 
mills,  factories,  and  other  businesses  of  America,  acting  as  inde- 
pendent units,  could  not  supply  the  needs  of  America  at  war. 
This  was  a  revelation.  Those  who  believed,  with  one  eminent 
political  figure,  that  a  million  American  men,  if  danger  threat- 
ened, could  spring  to  arms  overnight,  evidently  believed  that 


Photo  from  Morgan  Engineering   Company 


A  WAR  ORDNANCE  FACTORY 


Photo  from  Bethlehem  Steel  Company 

MACHINING  3-INCH  SHELL 


THE  CONTROL  OF  WAR  INDUSTRY          11 

the  arms  and  other  supplies  which  the  million  would  need 
could  be  materialized  with  equal  dispatch.  Yet  that  was  not 
to  be,  as  hard  experience  showed.  We  took  four  million  young 
men  for  the  Army  and  Navy.  Those  four  million  were  not 
only  removed  from  the  industrial  field  as  producers,  the  bur- 
den of  their  support  now  lapsing  upon  those  still  left  on  the 
farms  and  in  the  factories,  but  they  commenced  to  consume  the 
products  of  industry  at  four  times  the  normal  rate  of  con- 
sumption. 

The  soldier  wears  out  socks  and  shoes  and  shirts  and  coats 
much  faster  than  his  civilian  brother  does,  and  he  loses  and 
destroys  much  more.  Moreover,  the  supply  conduit  was  three 
thousand  miles  long — three  thousand  miles  of  railway  cars, 
warehouses,  ocean  terminal  bases,  the  holds  of  vessels,  and  on 
the  other  side  more  ocean  terminals,  more  warehouses,  more 
freight  cars,  railheads,  depots,  and  dumps — and  this  supply 
conduit  had  to  be  filled  before  the  supplies  could  flow  steadily 
to  the  troops  at  the  front:  another  element  which  explains 
the  enormous  consumption  of  supplies  by  a  mobilizing  army. 
The  creation  of  the  Army  was  the  equivalent  of  adding  sixteen 
million  people  to  the  population  of  America  and  expecting 
the  industry  of  the  country  to  support  the  excess  load. 

Perhaps  the  industry,  even  though  weakened  by  the  with- 
drawal of  four  million  of  its  workers,  might  with  its  own  indi- 
vidual efforts  have  succeeded  in  meeting  this  demand,  except 
for  one  cogent  fact:  the  implements  of  peace  are  not  those  of 
war.  These  sixteen  million  (in  the  equivalent)  began  con- 
suming a  range  of  supplies  entirely  different  from  what 
American  industry  knew.  War  even  wrote  changed  specifica- 
tions for  such  universal  commodities  as  food  and  fuel  and 
clothing;  and  outside  these  came  the  entire  range  of  battle 
machinery,  much  of  which  had  been  developed  since  the  sum- 
mer of  1914.  French  guns  with  hydropneumatic  recuperators, 
nose-fuse  shell,  airplanes,  airplane  machine  guns,  field  radio 
sets,  trench  mortars  and  their  ammunition,  grenades,  gas 
masks,  and  poisonous  chemicals — these  were  a  few  of  the 
thousands  of  modern  munitions  which  were  new  and  strange  to 


12  THE  GIANT  HAND 

our  industry.  Not  only  did  we  not  know  how  to  make  them, 
but  we  did  not  have  the  machinery  and  other  facilities  for  the 
work.  We  had  to  learn  to  make  them,  and  we  had  first  to  build 
the  tools  with  which  to  make  them. 

Everyone  wanted  to  help  the  Government  in  its  purpose; 
but  everyone,  following  his  own  uncontrolled,  individualistic 
notions,  succeeded  only  in  adding  to  the  confusion.  If  a  hun- 
dred automobile  factories  all  tried  to  manufacture  shell  at 
once,  and  a  hundred  others  simultaneously  tried  to  build  air- 
plane engines,  while  a  third  set  scrambled  to  turn  out  quarter- 
master trucks,  one  of  the  three  programs  was  bound  to  suffer, 
and  probably  all  of  them  would,  simply  because  the  raw  mate- 
rials would  not  go  around.  If  the  shipbuilding  industry  got  to 
the  steel  industry  first  for  its  ship  plates,  there  would  be  little 
steel  left  for  the  other  war  industrial  enterprises.  A  piano 
factory  was  of  no  war  use  if  it  continued  to  build  pianos,  but 
it  might  have  great  use  as  a  builder  of  airplane  wings ;  yet  how 
was  the  piano  maker  to  know  this,  and  who  was  to  look  him 
up  and  see  to  it  that  his  manufacturing  capacity  was  put  to 
useful  work"?  The  whole  effort  had  to  have  unity  of  direction, 
control  with  absolute  power  behind  it.  Request,  plea,  and 
prayer  were  in  vain — advisory  control  was  a  failure — because 
without  authority  to  say,  if  necessary,  what  had  to  be  done, 
the  individual  preferences  both  of  purchasers  within  the  Gov- 
ernment and  producers  outside  it  were  bound  to  assert  them- 
selves and  upset  the  advisory  arrangements  for  the  orderly 
conduct  of  war  industry. 

Once  American  industry  thoroughly  understood  the  need  of 
control,  and  after  the  agency  of  control,  with  the  authority 
behind  it,  came  into  existence,  it  seldom  became  necessary  for 
that  agency  to  exercise  any  summary  powers.  The  War  Indus- 
tries Board  did  nine-tenths  of  its  controlling  through  the 
enthusiastic  cooperation  of  those  eager  to  accept  direction. 
There  was  indeed  within  the  War  Industries  Board  a  giant 
hand  of  power  and  might  gloved  in  velvet,  but  the  hand 
was  seldom  raised.  "Show  us  how  we  can  help.  Never  mind 
the  question  whether  you  have  authority.  Tell  us  what  to  do, 


THE  CONTROL  OF  WAR  INDUSTRY          13 

and  we'll  do  it."  That  was  the  spirit  of  American  industry 
in  its  contact  with  the  War  Industries  Board.  Once  in  a  while, 
of  course,  the  occasional  hot-head,  the  unusual  but  existent 
selfish  desire,  raised  protest;  but  even  then  the  War  Industries 
Board  found  no  need  to  assert  the  eminent  domain  which  be- 
longed to  it  by  grant  of  the  nation.  Industry  itself  exerted  a 
force  that  was  irresistible.  If  forty-eight  manufacturers  of 
kitchen  stoves  agreed  to  suspend  the  making  of  seventy  per 
cent  of  their  product  during  the  war,  and  two  defied  the  ukase 
of  the  rest,  the  rest  compelled  the  two  by  the  mere  weight  of 
numbers  and  the  scorn  of  the  world  of  kitchen  stoves.  The 
power  of  the  Government  was  imminent  and  potential  rather 
than  active.  Only  from  such  a  spirit  of  industry  could  come 
the  maximum  of  productive  effort.  You  cannot  compel  men 
to  do  their  best:  you  can  compel  them  to  do  only  something. 

No  other  land  is  provided  better  than  America  with  natural 
resources.  With  the  exception  of  nitrates,  rubber,  and  tin,  and 
a  few  less  important  ones,  the  country  possessed  all  the  mate- 
rials with  which  to  wage  any  kind  of  war  for  any  length  of 
time  which  could  be  imagined.  Nor  was  there  any  question 
that  we  had  within  ourselves  the  fabricating  ability  to  make 
from  our  materials  any  and  all  war  supplies  needed.  America 
felt  secure.  She  rested  so  confidently  upon  her  natural  sup- 
plies that  she  had  never  taken  the  trouble  to  find  out  exactly 
what  she  did  have  in  the  way  of  material  resources  that  might 
be  devoted  to  the  waging  of  war.  Hence,  when  the  emergency 
came,  and  we  were  suddenly  called  upon  to  mobilize  our 
materials  and  factories  for  war,  the  mobilizing  effort  was 
halted  at  the  outset  by  the  disconcerting  fact  that,  while  we 
undoubtedly  possessed  everything,  we  did  not  know  how  much 
we  had  or  where  it  was  to  be  found.  The  lack  of  an  inventory 
and  catalogue  of  American  resources — the  same  sort  of  inven- 
tory which  Coffin  and  the  other  preparedness  pioneers  had 
tried  to  make  back  there  in  1916 — was  the  most  serious  lack 
which  the  war  industrial  program  faced  at  the  beginning,  and 
the  factor  of  most  delay. 

The  census1?  True,  the  United  States  takes  a  census  every 


14  THE  GIANT  HAND 

ten  years,  and  utilizes  most  of  the  interval  between  enumera- 
tions in  tabulating  and  publishing  the  statistics  secured.  The 
figures,  when  they  become  known,  no  longer  represent  current 
conditions.  The  federal  decennial  census  is  a  valuable  thing 
as  a  milestone  of  American  progress  and  as  the  basis  for  many 
important  governmental  acts ;  but  as  a  source  of  data  on  which 
to  base  an  industrial  mobilization  for  war  it  was  practically 
valueless,  and  would  not  have  gained  value  even  had  it  been 
taken  annually  and  the  statistics  published  forthwith.  The 
census  information  was  not  the  sort  needed.  The  census  merely 
enumerates  and  generalizes.  The  mobilizers  of  war  industry 
needed  particulars.  They  had  to  know,  not  how  many  machine 
shops  there  were  in  America,  but  such  facts  as  these:  Where 
are  the  machine  shops  that  can  make  shell?  Where  are  those 
that  can  make  guns'?  How  many  skilled  employees  have  they 
got*?  What  are  their  shop  facilities'?  Can  the  facilities  be 
easily  expanded*?  How  soon  can  they  get  on  a  war  basis'? 
The  census  told  us  to  an  acre  how  much  cultivated  farm  land 
we  had,  but  it  took  the  war  to  show  us  how  intensively  those 
acres  could  concentrate  upon  the  production  of  wheat,  pota- 
toes, or  castor  beans.  The  various  industrial  associations  gath- 
ered statistics  within  their  respective  industries,  but  even  these 
figures  did  not  contain  all  the  information  which  the  Govern- 
ment needed.  There  was  never  time  during  the  war  to  make  a 
complete  industrial  inventory,  and  as  a  result  we  had  to  base 
upon  insufficient  knowledge  calculations  involving  the  ex- 
penditure of  hundreds  of  millions  of  dollars,  the  government 
control  of  industry  altering  plans  and  rectifying  programs  as 
errors  were  discovered  in  the  calculations.  Adequate  prepara- 
tion in  the  future  will  compile  and  maintain  currently  the 
catalogue  of  American  manufacturing  resources  adaptable  to 
war  use. 

The  War  Industries  Board  as  an  institution  was  the  result 
partly  of  evolution  and  partly  of  fresh  creation.  In  commis- 
sioning Mr.  Baruch  as  chairman  of  the  Board,  the  President 
had  given  him  virtually  a  white  card.  The  one  limitation  upon 
him  was  that  he  was  "to  let  alone  what  was  being  successfully 


Photo  from  Navy  Department 


IN  AN  AIRPLANE  FACTORY 


Photo  from  Navy  Department 

LIBERTY  ENGINES  AT  TESTING  SHEDS 


THE  CONTROL  OF  WAR  INDUSTRY          15 

done."  Otherwise,  he  was  to  step  in  and  take  charge  wherever 
he  saw  any  part  of  the  industrial  program  faltering.  With 
duties  but  vaguely  denned,  it  was  impossible  to  sketch  an 
organization  with  cameo  outlines.  The  organization  expanded 
and  developed  as  its  duties  and  usefulness  increased.  More- 
over, it  had  to  take  hold  immediately;  it  had  to  function  even 
as  it  was  being  built,  because  time  was  the  important  element; 
and  so  there  was  no  opportunity  to  sit  down  and  plot  out  a 
theoretically  perfect  instrumentality  before  filling  it  in  with 
personnel.  Like  most  of  the  organization  of  the  War  Govern- 
ment, it  materialized  in  response  to  needs  as  the  needs  arose 
and  were  recognized. 

The  War  Industries  Board  mobilized  and  developed  the 
supplies  of  raw  materials,  established  and  enforced  a  priority 
system  which  gave  the  war  activities  a  regulated  access  to 
these  materials,  distributed  materials  and  labor  equitably 
among  the  projects  which  gained  the  priorities,  fixed  prices 
for  many  of  the  more  important  commodities,  conserved  mate- 
rials, and  did  these  and  many  other  things  successfully  because, 
in  the  first  place,  of  the  caliber  of  the  men  to  whom  Baruch 
delegated  the  high  powers  given  him  by  the  President.  These 
men  possessed  the  advantage  of  coming  directly  from  indus- 
try, and  hence  were  unhampered  by  the  traditions  of  bureau- 
cracy or  the  tripping  strings  of  departmental  practice.  They 
dealt,  moreover,  with  an  industry  which  not  only  did  not 
resist  control,  but  was  eager  for  its  extension.  They  functioned 
in  an  organization  flexible,  loosely  knit,  and  therefore  adapt- 
able to  shifting  conditions,  an  organization  of  direct  lines — 
the  only  sort  of  organization,  in  short,  which  could  deal  effec- 
tively with  a  situation  as  fluid  and  inconstant  as  that  of  war 
industry. 

The  task  of  the  organization  was  to  find  out  first  what  we 
had  with  which  to  fight,  then  to  discover  what  we  needed  with 
which  to  fight  (for  at  the  outset  there  was  not  the  knowledge 
within  the  Government  requisite  to  fix  manufacturing  pro- 
grams whose  products  would  be  neither  inadequate  to  the  man- 
power program  nor  overabundant),  to  make  what  was  scarce 


16  THE  GIANT  HAND 

go  round,  to  develop  new  facilities  of  supply,  to  keep  prices 
from  running  away  with  the  nation's  cash  and  credit,  and  to 
correlate  and  bring  together  in  a  single  machine  such  elements 
as  mines,  forests,  labor,  machinery,  and  military  and  civilian 
ideas,  all  to  the  end  that  the  resources  of  America  might  have 
the  chance  to  exert  their  crushing  weight — surely  a  task  com- 
parable in  importance  to  any  other  major  military  operation. 
How  some  of  these  projects  were  carried  out  it  will  be  the 
purpose  of  the  following  chapters  to  show. 


CHAPTER  II 

THE  CREATION  OF  THE  WAR  INDUSTRIES 

BOARD 

THE  organization  within  which  Howard  E.  Coffin  and 
the  others  began  the  mobilization  of  war  industry  was 
called  the  Council  of  National  Defense.  As  a  branch  of 
the  Government,  duly  set  up  by  act  of  Congress  (on  August  29, 
1916),  it  was  a  compromise  between  the  essentially  pacifistic 
spirit  of  the  country  at  large  and  the  views  of  the  thorough 
preparationists.  Congress  looked  at  the  events  in  Europe  and 
uneasily  agreed  that  something  had  to  be  done  about  our  own 
unreadiness  for  war,  although  the  majority  in  Congress  and 
the  majority  in  the  country  really  believed  that  we  should 
never  be  drawn  in  as  a  belligerent.  Something  had  to  be  done 
about  it ;  but  Congress  was  unwilling  to  fasten  upon  the  coun- 
try that  favorite  banshee  of  the  hustings,  a  military  caste, 
which  the  opponents  of  preparedness  professed  to  believe 
would  result  from  any  genuine  effort  to  mobilize  the  military 
power  of  the  nation.  The  result  of  the  middle  course  was  the 
Council  of  National  Defense,  which  was  neither  fish,  flesh, 
fowl,  nor  good  red  herring.  Its  mandate  was  the  "coordination 
of  industries  and  resources  for  the  national  security  and  wel- 
fare," and  to  accomplish  this  broad  mission  it  was  endowed 
with  the  magnificent  sum  of  $200,000 ! 

The  Council  proper  consisted  of  six  cabinet  officers,  the 
Secretaries  respectively  of  the  executive  departments  of  War, 
the  Navy,  the  Interior,  Agriculture,  Commerce,  and  Labor. 
This  was  nothing  new  in  the  Government.  These  officials 
already  existed  in  an  organization  whenever  they  came  to- 
gether at  the  cabinet  meetings.  The  milk  in  the  cocoanut,  or 


i8  THE  GIANT  HAND 

rather  the  appendage  which  had  to  wag  the  dog,  if  the  Coun- 
cil of  National  Defense  were  ever  to  get  anywhere,  was  the 
so-called  Advisory  Commission  of  the  Council,  a  group  of 
business  and  industrial  experts  nominated  by  the  Council  (the 
cabinet  officers)  and  appointed  by  the  President. 

During  the  first  year  of  its  existence  the  Advisory  Commis- 
sion consisted  of  Messrs.  Daniel  Willard,  Howard  E.  Coffin, 
Julius  Rosenwald,  Bernard  M.  Baruch,  Dr.  Hollis  Godfrey, 
Samuel  Gompers,  and  Dr.  Franklin  Martin.  It  is  evident  that 
these  gentlemen  possessed,  in  the  aggregate,  special  knowledge 
of  a  wide  range  of  American  affairs.  Willard  was  the  trans- 
portation expert.  He  was  president  of  the  Baltimore  &  Ohio 
Railroad.  Coffin,  eminent  engineer  and  vice-president  of  the 
Hudson  Motor  Company,  knew  shop  and  general  industrial 
conditions  in  the  field.  Rosenwald  was  the  merchant.  Once,  on 
an  official  visit  to  France,  he  wore  a  brigadier-general's  uni- 
form to  facilitate  his  investigations.  In  an  assemblage  of  high 
military  officials  of  America  and  the  Allies,  when  the  conver- 
sation was  thickly  punctuated  with  vocatives  of  General  This 
and  General  That,  he  suggested  that  his  proper  title  should  be 
General  Merchandise.  As  the  president  of  the  great  merchan- 
dizing firm  of  Sears,  Roebuck  &  Company,  he  was  an  eminent 
representative  of  general  merchandise,  which  thus  in  him  took 
its  place  in  the  high  councils  of  the  War  Government.  He 
brought  a  special  knowledge  of  matters  relating  to  many 
supply  problems,  particularly  those  of  quartermaster  supplies. 
Baruch  was  a  Wall  Street  operator,  a  man  who  played  a  lone 
and  spectacular  hand.  He  had  his  detractors,  his  enemies,  and 
his  last-ditch  friends — no  negative  character,  his.  Of  the 
original  seven  commissioners,  he  was  the  one  of  destiny.  That 
concentration  of  capital  which  the  country  calls  Wall  Street 
deals  on  its  most  magnificent  scale  with  raw  materials — oil, 
coal,  copper,  steel — and  it  was  toward  Baruch,  with  his  first- 
hand knowledge  of  the  control  of  resources,  that  the  questions 
of  raw  materials  gravitated.  Dr.  Godfrey,  as  president  of 
Drexel  Institute,  was  in  touch  with  industrial  science,  of 
which  so  much  use  was  to  be  made  by  war  industry.  Samuel 


Photo  from  Air  Service 

DE  HAVILAND  AIRPLANES  READY  FOR  SHIPMENT 
FROM  FACTORY 


Photo  from  Sperry   Gyroscope  Company 

ROCKING  TEST  FOR  GYROSCOPE  COMPASSES 


THE  WAR  INDUSTRIES  BOARD  19 

Gompers,  president  of  the  American  Federation  of  Labor, 
became  the  contact  point  with  labor.  Dr.  Martin,  secretary- 
general  of  the  American  College  of  Surgeons,  brought  a 
narrower  specialty,  a  knowledge  of  medical  supplies. 

The  Advisory  Commission,  as  it  was  charted  on  paper,  pos- 
sessed in  theory  no  executive  powers.  It  could  only  advise; 
and  the  Council  of  National  Defense  proper  (the  individual 
cabinet  officers)  was  free  to  accept  the  advice  or  reject  it,  as 
it  chose.  And  even  if  the  members  of  the  Council  did  accept 
it,  there  was  no  assurance  that  the  purchasing  bureaus  in  their 
departments  would  follow  it,  for  the  control  of  the  periodical 
civilian  Secretaries  over  such  entrenched  bureaus  as  those  of 
the  War  Department  was  less  absolute  than  an  outsider  would 
think.  But,  even  though  the  law  had  carefully  withheld  from 
the  mobilizing  organization  any  authoritative  voice  in  the 
Government,  a  new  element  arose  to  give  it  in  fact  an  unex- 
pected, but  real,  authority.  This  element  was  an  aroused  public 
opinion.  America  was  beginning  to  wake  up.  As  the  press  gave 
publicity  to  the  work  of  the  Council  of  National  Defense  (it 
was  in  reality  the  work  of  the  Advisory  Commission),  the 
people  began  to  see  the  importance  of  what  was  going  on — 
particularly  people  in  the  eastern  part  of  the  United  States, 
whose  spokesmen,  the  eastern  newspapers  and  magazines,  had 
greatest  influence  in  Washington.  Thus  the  Council  of  Na- 
tional Defense  was  enabled  to  do  a  valuable  preliminary  work 
in  the  mobilization  of  war  industry — planning  and  coordinat- 
ing, taking  up  concrete  problems  and  creating  organizations 
to  deal  with  them,  and  leaving  it  to  existing  authority  to 
enforce  the  plans  perfected. 

All  this  work  began  in  a  small  way,  and  for  a  considerable 
time  did  not  make  much  progress  in  a  country  which,  enrap- 
tured by  the  success  of  the  Administration  in  keeping  out  of 
war,  placed  war  among  the  remote  contingencies.  But  before 
the  winter  of  1916-1917  had  reached  its  median,  Germany's 
proclamation  of  unrestricted  submarine  warfare  had  put  a 
different  complexion  upon  things.  War  was  now  seen  to  be 
inevitable,  and  there  was  at  once  universal  recognition  of  the 


20  THE  GIANT  HAND 

value  of  the  services  of  the  Council  of  National  Defense. 
More  might  have  been  done,  but  what  the  Council  had  accom- 
plished represented  just  that  much  ground  gained  in  the  mobi- 
lization of  the  nation  for  war.  We  must  think  of  the  Council 
of  National  Defense,  in  this  period  from  the  middle  of  Jan- 
uary, 1917,  up  to  and  beyond  the  declaration  of  war  in  April, 
as  growing  tremendously  in  size  and  in  the  scope  of  its  enter- 
prises. Where,  but  a  few  months  or  even  weeks  before,  it  had 
been  a  small,  if  not  an  obscure,  organization,  it  now  numbered 
hundreds  of  employees,  occupied  practically  the  whole  of  one 
of  the  largest  office  buildings  in  Washington,  and  never  saw 
the  day  that  did  not  add  appreciably  to  its  size  and  prestige. 

It  was  the  fate  of  this  advisory  body,  the  Council  of  Na- 
tional Defense,  that  while  it  never  received  authority  itself, 
as  soon  as  one  of  its  branches  developed  an  importance  that 
demanded  authority  for  its  acts  that  branch  parted  from  the 
parent  stem  and  took  root  as  a  new  entity.  Again  and  again  this 
occurred.  Originally  there  were  committees  within  the  Council 
for  investigations  respectively  in  the  national  food  supply, 
the  national  fuel  supply,  and  in  the  railroad  transportation 
situation.  These  organizations  were  the  antecedents  respec- 
tively of  the  United  States  Food  Administration,  the  United 
States  Fuel  Administration,  and  the  United  States  Railroad 
Administration.  Shorn  of  its  most  important  functions,  the 
Council  of  National  Defense  declined  in  the  final  months  of 
the  war  to  the  inconspicuous  position  of  an  agency  which 
mobilized  volunteer  war  assistance  in  the  communities  of 
America,  while  its  numerous  progeny  flourished  in  the  exer- 
cise of  super-departmental  powers. 

Now,  there  developed  within  the  Council  of  National  De- 
fense another  of  those  branches  destined  in  time  to  become 
an  independent  organization;  a  branch  presently  to  develop 
into  the  body  with  which  we  are  chiefly  concerned,  the  War 
Industries  Board.  Three  days  after  the  declaration  of  war  there 
was  formed,  under  the  Council  of  National  Defense,  the  Gen- 
eral Munitions  Board.  This  Board  collected  within  itself  all 
the  Council's  activities  relating  to  the  production  of  supplies 


THE  WAR  INDUSTRIES  BOARD  21 

for  the  War  and  Navy  Departments.  It  was  not  primarily 
concerned  then  with  any  other  war  industrial  activities,  ex- 
cept as  it  came  in  contact  with  them  in  arranging  precedence 
for  the  supply  orders  of  the  War  and  Navy  Departments, 
bearing  in  mind  the  necessities  of  the  Shipping  Board  and  of 
the  purchasing  agencies  of  the  Allies.  In  this  effort  it  began 
working  out  the  first  principles  of  priority,  the  administration 
of  which  was  later  to  become  such  an  important  branch  of 
the  War  Industries  Board's  work.  The  chief  task  of  the  Gen- 
eral Munitions  Board  was  to  coordinate  army  and  navy  pur- 
chases and  end,  if  possible,  competitive  buying  by  different 
branches  of  the  Government.  One  of  its  greatest  achievements 
was  the  mobilization  of  contractors  and  of  the  vast  quantities 
of  building  materials  used  in  the  construction  of  the  national 
army  cantonments.  Beyond  this  it  attempted  to  be  an  auxiliary 
of  the  executive  departments  in  the  procurement  of  materials 
in  which  there  were  shortages.  Machine  guns,  shell,  gauges 
(those  small  prerequisite  appliances  without  which  there  could 
be  no  war  manufacture),  hospital  supplies,  wood  for  army 
vehicles,  car  shortages  (vexatious  questions  then  referred  to 
the  Railway  War  Board,  the  organization  with  which  the  rail- 
roads of  the  country  attempted  to  attain  unified  operation) — 
these  were  matters,  among  others,  over  which  the  General 
Munitions  Board  labored  mightily.  From  a  rising  industrial 
chaos,  which  resulted  when  all  the  governmental  purchasing 
agencies  began  simultaneously  to  buy  heavily  in  a  competitive 
market  that,  even  under  direction,  would  not  have  been  able 
to  supply  everything  requisitioned,  the  General  Munitions 
Board  tried,  but  tried  unsuccessfully,  to  bring  order. 

The  General  Munitions  Board  consisted  of  twenty-four 
members,  seventeen  of  them  uniformed  representatives  of 
the  War  and  Navy  Departments,  the  other  seven  civilians. 
One  of  the  latter,  Mr.  Frank  A.  Scott,  was  chairman.  Scott 
later  became  a  war  casualty,  as  truly  as  if  he  had  been  gassed 
or  shot  in  France;  and  he  was  only  one  of  several  who  fell 
in  the  Battle  of  Washington,  which  bore  more  resemblance 
to  an  actual  battle  than  one  might  suppose.  Men  forgot  the 


22  THE  GIANT  HAND 

limitations  of  their  physical  strength  in  their  anxiety  to  give 
their  utmost  to  the  Government;  and  some  of  them  died,  and 
some  faced  the  future  with  broken  health.  Scott  brought  to 
Washington  a  background  of  unusual  success  for  so  young  a 
man.  His  combination  of  winning  personality  and  ability  first 
attracted  attention  when  he  was  secretary  of  the  Cleveland 
Chamber  of  Commerce.  From  that  post  he  stepped  across  into 
industry,  and  when  the  war  broke  out  he  was  general  manager 
of  the  firm  of  Warner  &  Swasey,  of  Cleveland,  widely  known 
as  builders  of  mountings  for  great  telescopes  and,  in  American 
industry  generally,  celebrated  for  their  principal  product — 
machine  tools  of  precision.  In  addition  he  possessed  the  special 
qualification  of  having  been  for  years  an  amateur  student  of 
war  tactics  and  campaigns. 

As  chairman  of  the  General  Munitions  Board,  Scott  flung 
himself  at  a  confused  cordillera  of  work  that  seemed  to  rise 
superior  to  human  powers.  He  knew  no  hours.  He  was  at  his 
desk  at  eight  o'clock  in  the  morning,  not  to  quit  it  until  mid- 
night, with  even  his  meal  hours  given  over  to  conference  and 
decision.  When  well-wishers  remonstrated  with  him,  his  reply 
was  that  it  was  the  job  only  which  counted  and  the  supreme 
necessity  of  getting  things  done  in  the  briefest  possible  time, 
that  there  was  only  one  war  to  prosecute,  but  many  men  to 
prosecute  it,  and  that  if  some  fell,  others  would  step  into  their 
places — the  work  would  still  go  on.  He  was  right.  The  day 
came  when  Frank  Scott  was  invalided  home,  and  for  a  long 
time  his  physicians  did  not  know  if  he  would  live  or  die;  but 
the  work  went  on  just  the  same.  America  is  to-day  the  better, 
the  stronger,  the  more  a  power,  for  the  work  he  did  back  there 
in  the  pioneering,  pathfinding,  beginning  days  of  the  war. 

The  General  Munitions  Board  was  short-lived.  Even  its 
creators  regarded  it  as  only  a  stop-gap  organization  which 
could  function  until  something  better  was  worked  out.  It 
failed  to  make  headway  against  the  industrial  demoralization 
which,  in  the  spring  and  early  summer  of  1917,  was  threat- 
ening to  wreck  the  whole  war-supply  program  and  was,  indeed, 
greatly  delaying  the  most  important  procurement  activities. 


Photo  by  Frank  Moore 


FRANK  A.  SCOTT 


THE  WAR  INDUSTRIES  BOARD  23 

In  the  hothouse  atmosphere  of  war  the  Board  grew  rankly,  out 
of  proportion,  ill  articulated,  top-heavy  with  dignitaries,  aides, 
assistants,  committees,  boards,  divisions,  and  branches,  their 
work  uncoordinated  and  often  overlapping.  Nothing  about  it 
was  clearly  defined.  Its  chief  lack,  however,  was  the  funda- 
mental one  of  authority.  It  possessed  no  rights  of  initiation.  Its 
province  was  merely  to  review  and  coordinate  such  purchasing 
activities  as  were  voluntarily  brought  to  its  consideration  by 
the  departmental  bureaus.  The  bureaus  naturally  resented  any 
outside  restrictions  upon  their  freedom;  and  since  there  was 
no  compulsion  upon  them  to  seek  the  good  offices  of  the  Gen- 
eral Munitions  Board,  they  did  not  call  upon  it  to  any  great 
extent,  but  placed  far  more  contracts  independently  than  they 
did  with  the  assistance  of  the  Board.  Industry  staggered  under 
the  uncontrolled  rush  of  competitive  buying.  The  confusion 
became  steadily  worse.  The  chief  value  of  the  General  Muni- 
tions Board  was  that  its  experiences  pointed  the  way  to  abso- 
lute control,  the  one  factor  that  could  save  the  war  enterprise. 
On  July  28,  1917,  after  less  than  four  months  of  existence, 
the  General  Munitions  Board  gave  way  and  was  succeeded  by 
the  War  Industries  Board. 

This  procedure  constituted  in  reality  a  reorganization  of  the 
General  Munitions  Board.  Mr.  Scott,  even  then  fighting 
against  exhaustion  of  brain  and  nerve,  was  made  chairman  of 
the  new  War  Industries  Board,  which  still  continued  to  be 
part  of  the  Council  of  National  Defense,  although  its  impor- 
tance was  so  great  that  it  quite  overshadowed  the  parent  or- 
ganization. It  still  possessed  no  legal  authority  over  the  execu- 
tive departments,  but  from  the  date  of  its  formation  its  actual 
authority  began  to  grow.  As  a  controlling  organization  it 
became  efficient,  and  efficiency  was  a  thing  which  the  federal 
departments  sorely  needed.  The  departmental  heads  gradually 
enforced  the  cooperation  of  the  unexecutive  War  Industries 
Board  upon  the  procurement  bureaus. 

This  was  not  accomplished  in  a  hurry.  For  several  months 
after  the  formation  of  the  Board,  the  confusion  in  industry 
continued.  In  fact,  American  war  industry  did  not  cross  the 


24  THE  GIANT  HAND 

divide  until  the  late  autumn  of  1917.  After  that  the  control 
gained  on  the  disorganization,  becoming  absolute  about  four 
months  later. 

The  efficiency  of  the  War  Industries  Board,  as  formed  from 
the  General  Munitions  Board,  was  due  to  the  efficiency  of 
its  organization.  For  the  first  time  complete  activities  in  indus- 
trial control  were  brought  together  in  single  branches  of 
the  Board  and  placed  under  the  direction  of  single  executives. 
And  now  emerge  from  the  mass  of  organization  some  names 
destined  to  be  better  known  later  on.  All  the  activities  relat- 
ing to  what  became  known  as  priority  were  brought  together 
in  a  single  department  directed  by  Judge  Robert  S.  Lovett,  the 
eminent  railroad  executive.  Matters  relating  to  the  procure- 
ment of  finished  products  went  in  toto  under  the  direction  of 
Mr.  Robert  S.  Brookings,  who  before  joining  the  War  Gov- 
ernment was  president  of  the  board  of  trustees  of  Wash- 
ington University  at  St.  Louis.  Mr.  Hugh  Frayne,  a  general 
organizer  of  the  American  Federation  of  Labor,  went  to  the 
head  of  all  board  work  relating  to  the  human  side  of  war  indus- 
try ;  and  the  raw  materials  of  war  manufacture — the  develop- 
ment and  control  of  them — went  to  Mr.  Baruch. 

It  was  the  dawn  of  a  new  day,  a  new  era,  distinct  from  the 
old  in  many  ways,  but  in  no  way  more  than  in  the  creation  of 
the  so-called  commodity  sections,  so  famous  afterwards  in 
industry  when  they  were  fifty-seven  in  number,  although  at  the 
outset  they  were  neither  famous  nor  fifty-seven.  The  com- 
modity sections  first  sprang  from  the  Committee  on  Raw 
Materials.  It  was  early  recognized  that  the  crucial  point  in  the 
struggle  for  war  supplies  would  be  the  development  of  the 
raw  materials  for  manufacture.  That  was  Baruch's  work  from 
the  outset,  for  he  served  in  the  General  Munitions  Board  as 
chairman  of  the  Committee  on  Raw  Materials.  That  commit- 
tee, without  change  in  name  or  in  chairman,  continued  to  exist 
throughout  the  war,  being  first  transferred  bodily  to  the  War 
Industries  Board,  the  subsidiary  to  the  Council  of  National 
Defense,  and  later  carried  over  into  the  new  organization  of 
the  War  Industries  Board,  when  it  was  made  independent  and 


THE  WAR  INDUSTRIES  BOARD  25 

endowed  with  supreme  powers.  And  although  the  committee's 
chairman  became  director  of  the  whole  enterprise,  he  never 
surrendered  his  place  at  the  head  of  the  committee. 

The  commodity  sections  at  first  dealt  solely  in  raw  mate- 
rials, each  section  having  a  specific  material  under  its  juris- 
diction. But  as  the  war  progressed,  other  shortages  beside 
those  in  raw  materials  asserted  their  importance;  and  com- 
modity sections  were  created  to  deal  with  finished  products 
as  well.  The  commodity  sections  became  the  vitals  of  the 
ultimate  War  Industries  Board. 

Each  commodity  section  had  a  chief,  whose  qualifications 
were  dual — he  had  to  know  the  material  with  which  his  section 
dealt,  yet  he  could  have  no  business  interest  in  the  material. 
It  was  not  always  easy  to  find  such  men.  The  first  action  of 
the  section  chief,  once  he  had  organized  his  section  for  the 
work  ahead,  was  to  organize  the  branch  of  industry  which 
produced  the  commodity  in  question  in  such  a  way  that  it 
could  deal  with  the  section  as  a  unit.  Here  the  War  Industries 
Board  appealed  to  the  Chamber  of  Commerce  of  the  United 
States,  which  assembled  representatives  of  the  various  indus- 
tries and  had  them  appoint  manufacturers'  committees,  each 
committee  qualified  to  speak  for  its  branch  of  industry.  Thus, 
if  the  woolen  knit  goods  section  desired  to  curtail  the  civilian 
consumption  of  knit  goods  or  change  the  specifications  of  any 
of  the  Army's  knit  goods,  it  had  to  take  up  these  matters,  not 
with  all  the  wool  knitters,  but  merely  with  a  committee  which 
represented  them  all.  In  general,  each  commodity  section  dealt 
with  questions  of  what  to  purchase,  where  to  purchase,  and 
what  price  to  pay. 

It  will  be  noted  that  the  decisions  in  these  questions  were 
not  left  to  industry  itself,  but  remained  with  the  chief  of  the 
commodity  section  of  the  War  Industries  Board — an  impor- 
tant distinction.  The  Government  did  not  allow  its  suppliers 
to  determine  prices,  but  reserved  that  right  to  itself.  On  the 
other  hand,  by  consulting  industry  in  this  way,  by  giving  it  a 
voice  in  matters  affecting  its  own  welfare,  the  Government 


26  THE  GIANT  HAND 

secured  the  hearty  cooperation  of  industry,  without  which  no 
control  could  have  attained  a  maximum  of  effectiveness. 

In  time,  the  commodity  sections  also- eliminated  competitive 
buying  on  the  part  of  the  governmental  bureaus.  In  each 
section  were  represented  all  the  official  agencies  which  pur- 
chased the  particular  commodity  administered  by  the  section. 
These  officers,  therefore,  came  in  touch  with  the  particular 
problems  of  each  branch  of  industry  and  thus  were  able  to 
coordinate  the  purchasing  activities  of  their  several  bureaus. 

This  was  a  new  way  for  the  Government  to  do  business.  In 
the  old  days  the  Government  and  its  contractors  were  antago- 
nists. Most  business  men  regarded  the  Government  as  an 
undesirable  customer.  The  Government  was  slow  to  make  up 
its  mind  what  to  buy,  fussy  about  specifications,  apt  to  change 
plans  in  the  middle  of  a  manufacturing  operation,  and  slow  to 
pay  the  bill  after  the  supplies  were  delivered.  The  firms  which 
dealt  with  the  Government  made  a  specialty  of  that  sort  of 
work.  Many  expected  the  old  order  to  continue  after  the  war 
broke  out;  and  it  did  continue  for  some  time,  the  steadily 
rising  scale  of  prices  attracting  to  Washington  crowds  of  con- 
tractors' agents.  But  the  commodity  sections  changed  all  that, 
and  the  Government  and  the  producers  became  co-partners  in 
the  enterprise  of  winning  the  war. 

"Look  here,"  said  the  commodity  sections,  in  effect,  "we 
need  your  help.  We  expect  to  pay  well  and  promptly,  but  we 
don't  want  any  more  of  this  caveat-emptor  stuff  in  the  supply 
situation.  We  don't  want  American  soldiers  to  shiver  because 
of  shoddy  uniforms  or  to  be  killed  by  defective  powder.  No 
embalmed  beef  in  this  man's  war.  This  is  likely  to  be  a  long 
struggle,  and  we  are  all  Americans  together — none  of  us  wants 
half  of  America  starving  to  enrich  the  other  half.  Let's  forget 
our  selfish  interests  on  both  sides.  You  tell  us  what  you  can 
do  and  what  you  think  is  fair  for  us  to  do;  and  we'll  go  ahead 
and  do  it." 

Such  an  attitude  had  a  marked  effect  upon  the  Govern- 
ment's business.  The  sealed,  impersonal  bid  vanished,  as  did 
the  contractor  who  relied  upon  "influence"  to  land  business  for 


Photo  by  Moffett 


DANIEL  WILLARD 


THE  WAR  INDUSTRIES  BOARD  27 

him.  Orders  were  placed  according  to  the  capacity  of  industry 
to  absorb  them,  and  there  was  work  to  keep  all  facilities  busy 
on  equal  terms.  Above  all,  in  Washington,  directing  the  enter- 
prise, were  business  men,  industry's  own  kind  of  men,  each 
knowing  his  own  industry,  and  all  dealing  with  industry  in  a 
manner  frank  and  aboveboard. 

Mr.  Daniel  Willard  succeeded  Mr.  Scott  as  chairman  of 
the  War  Industries  Board.  In  December,  1917,  the  Govern- 
ment seized  the  railroads.  Rail  transportation  in  America 
nearly  broke  down  altogether  in  the  first  weeks  of  that  winter. 
One  of  the  most  important  railroad  arteries  in  the  East  was 
the  Baltimore  &  Ohio,  of  which  Mr.  Willard  was  president. 
He  resigned  as  chairman  of  the  War  Industries  Board  in  Jan- 
uary in  order  to  go  back  to  his  railroad  to  help  it  out  of  the 
tangle  into  which  traffic  had  wound  itself.  Until  March  the 
War  Industries  Board  went  chairmanless.  Then  Congress 
passed  the  Overman  Act,  which  gave  the  President  authority 
to  reorganize  the  Government  as  he  chose  for  greater  war 
efficiency.  On  March  4,  1918,  the  President  asked  Mr.  Baruch 
to  take  the  chairmanship  of  the  Board,  which  he  was  there- 
upon to  expand,  and  which  was  to  be  vested  with  plenary 
powers. 

Bernard  M.  Baruch,  fifty  in  actual  years,  but  nearer  twenty- 
five  in  physical  vigor,  spirit,  enthusiasms,  and  all  that  is 
youth,  had  in  his  previous  work  in  the  War  Industries  Board 
shown  himself  to  be  a  man  whose  talents  fitted  him  to  become 
general  manager  of  American  war  industry.  President  Wilson 
sometimes  made  unlooked-for  selections  of  men  for  important 
offices  in  the  War  Government;  yet,  surprisingly  often,  his 
choices  turned  out  to  be  well  made.  When  the  coal  crisis  came 
and  there  had  to  be  an  official  to  manage  the  whole  coal  busi- 
ness as  a  unit,  who  but  President  Wilson  would  have  picked 
out  for  the  place,  not  some  commander  of  industry,  but  a 
college  president?  Yet  Dr.  Garfield  in  the  United  States  Fuel 
Administration,  although  with  his  heatless  Mondays  and  his 
strictures  upon  the  industry  he  made  himself  for  the  time 
about  the  best-hated  man  in  America,  did  manage  the  Fuel 


28  THE  GIANT  HAND 

Administration  successfully  and  saved  the  coal  situation  at  a 
time  when  it  seemed  that  it  must  fail  war  industry.  So  with 
Baruch.  This  is  not  saying  that  some  great  industrial  figure 
like  Charles  M.  Schwab  or  E.  H.  Gary  might  not,  each  in  his 
own  way,  have  made  a  good  job  of  managing  war  industry.  It 
is  merely  saying  that  Baruch  did  make  a  good  job  of  it — in 
fact,  he  was  a  great  success  in  one  of  the  most  difficult  roles 
into  which  the  Government  ever  thrust  a  man.  And  so  it  is 
with  Bernard  M.  Baruch,  with  his  qualifications,  and  with 
the  secret  of  his  success — if  we  can  bring  that  into  focus — 
that  we  are  here  concerned. 

Baruch  was  a  Wall  Street  man — a  gambler,  as  his  de- 
tractors would  call  him;  a  speculator,  as  he  sometimes  called 
himself.  Therefore  he  had  dealt  with  industry  from  the  top, 
and  his  was  not  the  restricted  point  of  view  of  one  versed  in 
but  a  single  specialty  in  industry.  When  he  referred  to  him- 
self as  a  speculator,  Mr.  Baruch  belittled  his  own  career.  As 
a  speculator  he  was  popularly  known — that  was  his  newspaper 
reputation — but  the  insiders  know  him  as  an  extensive  and 
particularly  bold  industrial  operator,  his  main  interests  being 
in  raw  materials  of  one  sort  or  another,  but  principally  min- 
erals. More  than  one  important  commodity  to-day  pays  tribute 
to  Baruch's  foresight  and  imagination.  His  eyes  have  con- 
tinually searched  the  industrial  field  for  opportunities  for 
investment  and  development. 

Wall  Street  is  the  world's  roughest  arena.  There  are  few 
rules  there  this  side  of  the  written  statutes,  and  sportsmanship 
and  consideration  for  the  weak  virtually  do  not  exist.  In  that 
pit  Baruch,  always  conducting  a  single-handed  enterprise, 
went  up  to  the  top.  It  is  only  rarely  that  such  figures  arise  in 
Wall  Street.  Most  of  those  who  become  powerful  have  the 
advantage  of  important  industrial  connections  which  give 
them  ex-officio  standing  in  the  first  place,  or  else  they  are  in 
control  of  the  funds  in  banks  or  in  insurance  companies. 
Baruch  played  a  lone  hand.  He  made  it  a  guiding  principle  for 
himself  to  steer  away  from  the  cliques,  syndicates,  and  com- 
binations which  conduct  most  of  the  big  operations  in  the 


THE  WAR  INDUSTRIES  BOARD  29 

Street.  He  instinctively  shunned  situations  in  which  he  could 
not  act  upon  his  own  initiative.  With  that  system  he  had  suc- 
ceeded, had  gone  to  the  top  above  the  reach  of  the  financial 
cabals  and  coalitions  which  are  always  seeking  to  drag  down 
the  insecure.  And  this  method,  this  experience  of  his,  had 
an  important  bearing  upon  what  we  have  here  under  consid- 
eration. Baruch  was  the  thousandth  man ;  he  had  seen  the  nine 
hundred  and  ninety-nine  go  down  where  he  had  negotiated  the 
climb.  Therefore  he  was  invested  with  a  sublime  confidence  in 
his  own  judgments.  He  had  backed  his  judgments  so  often, 
and  they  had  won  for  him  with  such  unfailing  regularity  over 
so  many  years,  that  he  regarded  them  as  infallible. 

This  characteristic  was  one  of  his  chief  assets  when  he  came 
to  undertake  the  administration  of  war  industry.  As  a  rule 
Baruch  insisted  that  his  subordinates  in  the  War  Industries 
Board  should  resolve  their  own  difficulties,  but  once  in  a 
while  he  consented  to  give  his  opinion  as  to  what  ought  to  be 
done  in  some  emergency.  During  the  early  part  of  the  meet- 
ing all  would  be  indecision,  uncertainty,  arguments  this  way 
and  that,  timidity;  and  then  the  boss  of  the  establishment, 
after  he  had  heard  both  sides,  would  make  up  his  mind  and 
deliver  his  judgment;  and  at  once  the  clouds  of  doubt  rolled 
away,  and  the  sunshine  of  certainty  flooded  the  conference. 
The  subordinates  might,  and  probably  often  did,  know  more 
about  the  subject  than  Baruch  did;  and  yet  they  never  thought 
of  questioning  his  decision.  The  man's  own  confidence  in  his 
judgment  was  so  perfect  that  it  begat  the  same  sort  of  con- 
fidence in  others. 

Another  characteristic  of  Baruch's  in  the  conduct  of  his  own 
affairs  was  his  treatment  of  the  subordinates  whom  he  gathered 
about  himself.  When  he  had  acquired  a  property,  he  found  a 
man  to  run  it,  but  the  man  was  not  to  run  it  always  with  ref- 
erence to  what  Baruch  would  think  about  it.  Baruch's  con- 
fidence in  his  judgment  of  men  was  not  less  complete  than  in 
his  other  judgments.  When  he  found  the  man  he  wanted,  he 
placed  him  in  complete  charge,  and  told  him  to  stand  on  his 
own  feet  and  not  bother  Baruch  with  details.  The  financier 


30  THE  GIANT  HAND 

would  look  only  at  results  and  would  not  scrutinize  methods. 
Years  of  activities  of  this  sort  had  not  only  given  him  a  wide 
acquaintance  with  the  men  who  guide  the  industries  of  the 
United  States,  but  had  refined  his  judgment  of  men.  It  is 
doubtful  if  the  endowment  of  judging  men  correctly  is  ever 
an  acquired  talent — it  is  probably  born  in  a  man  to  size  up  his 
fellows  accurately — -but  Baruch's  innate  gift  for  it  had  been 
developed  and  perfected  by  his  business  experience.  There  is  no 
questioning  his  superlative  ability  in  this  direction.  Baruch's 
knowledge  of  men  was  practically  infallible;  he  never  made 
mistakes. 

Baruch  has  said  that  the  men  of  the  War  Industries  Board 
were  "hand-picked"  by  himself,  assisted  by  his  associates.  As 
a  rule,  to  direct  the  principal  activities  of  the  Board  he  selected 
men  who  were  not  widely  known  in  the  United  States;  but 
you  may  be  sure  that  Baruch  knew  them  in  advance,  had  come 
in  contact  with  them  more  than  once  in  his  private  operations, 
and  before  he  ever  appointed  them  knew  that  they  were  big 
enough  for  the  jobs.  They  in  turn  selected  their  own  subordi- 
nates, and  so  on  down;  and  the  whole  organization  was  good 
because  the  men  at  the  top  were  the  right  sort. 

Then,  having  selected  his  aides,  Baruch  took  them  com- 
pletely into  his  confidence,  a  thing  that  some  executives  find  it 
hard  to  do.  He  continually  put  them  forward  before  the  pub- 
lic rather  than  himself,  so  that  each  man  felt  that  he  should 
secure  recognition  for  his  services.  Finally — and  in  this  more 
than  in  any  other  thing  lay  the  secret  of  his  success — Baruch 
possessed  the  heaven-sent  ability  to  unload  his  executive  re- 
sponsibilities upon  the  shoulders  of  subordinates.  As  in  his 
own  business,  so  in  the  War  Industries  Board  he  picked  his 
men  and  then  told  them  to  go  ahead  and  run  their  own  de- 
partments without  troubling  him  with  their  problems  or  requir- 
ing him  to  certify  their  decisions. 

And  this  is  one  of  the  most  difficult  of  all  things  to  do — for 
a  man  responsible  for  results  to  delegate  his  powers  to  others 
and  then  allow  the  others  to  work  without  interference. 
Usually  the  more  ability  a  man  attains  in  any  field,  the  more 


Photo  by  Harris  6?  Ewing 

BERNARD  M.  BARUCH 


THE  WAR  INDUSTRIES  BOARD  31 

distrustful  he  becomes  of  the  merits  of  others'  work  in  that 
same  field.  If  he  is  responsible  for  the  work,  then  he  must 
have  the  work  done  precisely  as  he  would  do  it;  and  since  no 
others  can  work  as  he  does,  he  must  burden  himself  with  the 
details  of  it  all.  For  that  reason  only  a  few  men  of  specialized 
ability  are  good  executives.  It  is  only  the  rare  man  who  com- 
bines with  ability  a  broad  tolerance  of  the  abilities  of  others, 
and  who  is  not  bound  to  his  own  methods.  The  war  broke 
executives  who  could  not  get  their  heads  above  details :  Baruch 
came  out  of  it  twenty  pounds  heavier  than  when  he  went  in. 

One  thing  should  be  said  about  Baruch  to  explain  his  pecul- 
iar position  of  influence  in  the  War  Government — he  had  the 
ear  and  the  confidence  of  the  President,  an  advantage  which 
few  of  the  executive  heads  in  Washington  could  claim.  The 
confidence  of  the  President  gave  him  a  de  facto  power  which 
no  mere  written  delegation  of  authority  could  convey.  His 
position  enabled  him  to  cut  corners  and  employ  direct  methods, 
in  contrast  to  the  involved  official  procedure,  without  much 
regard  for  the  feelings  of  governmental  dignities.  With  his 
keen  knowledge  of  men  he  soon  discovered  in  the  departments 
and  administrations  those  officials  whose  minds  went  along 
with  his;  and,  whether  they  were  the  heads  of  their  institu- 
tions or  not,  it  was  his  habit  to  deal  with  these  men  directly, 
wasting  no  time  in  following  up  the  tedious  official  channels 
of  communication. 

The  success  of  Bernard  M.  Baruch,  to  sum  up,  was  due  to 
his  power  of  brushing  aside  all  nonessentials  and  to  his  direct 
and  simple  habit  of  thought,  which  resulted  in  his  reaching 
prompt  and  decisive  conclusions;  to  his  confidence  in  his  own 
judgment;  to  his  infallible  judgment  of  men;  to  his  policy 
of  transferring  his  authority  to  his  subordinates;  to  his  cour- 
age ;  to  his  calmness  in  times  of  great  stress ;  to  the  confidence 
which  he  inspired  in  subordinates  and  others  with  whom  he 
came  in  contact;  to  his  modesty — he  always  avoided  publicity 
and  attempted  to  give  credit  to  others — and  finally  to  his 
organizing  ability. 

The  charter  of  the  War  Industries  Board  was  in  the  letter 


32  THE  GIANT  HAND 

from  President  Wilson  which  conferred  the  chairmanship  upon 
Mr.  Baruch  and  proclaimed  a  new  dispensation.  This  docu- 
ment is  reprinted  here  in  full: 

The  White  House, 

Washington,  March  4,  1918. 
DEAR  MR.  BARUCH  : 

I  am  writing  to  ask  if  you  will  not  accept  appointment  as  Chairman 
of  the  War  Industries  Board,  and  I  am  going  to  take  the  liberty  at  the 
same  time  of  outlining  the  functions,  the  constitution,  and  action  of 
the  Board  as  I  think  they  should  now  be  established. 
The  functions  of  the  new  Board  should  be — 

(1)  The  creation  of  new  facilities  and  the  disclosing  and,  if  neces- 
sary, the  opening  up  of  new  or  additional  sources  of  supply; 

(2)  The  conversion  of  existing  facilities,  where  necessary,  to  new 
uses; 

(3)  The  studious  conversion  of  resources  and  facilities  by  scientific, 
commercial,  and  industrial  economies; 

(4)  Advice  to  the  several  purchasing  agencies  of  the  Government 
with  regard  to  the  prices  to  be  paid ; 

(5)  The  determination,  wherever  necessary,  of  production  and  of 
delivery  and  of  the  proportions  of  any  given  article  to  be  made  imme- 
diately accessible  to  the  several  purchasing  agencies  when  the  supply 
of  that  article  is  insufficient,  either  temporarily  or  permanently ; 

(6)  The  making  of  purchases  for  the  Allies. 

The  Board  should  be  constituted  as  at  present  and  should  retain,  so 
far  as  necessary  and  so  far  as  consistent  with  the  character  and  pur- 
pose of  the  reorganization,  its  present  advisory  agencies ;  but  the  ulti- 
mate decision  of  all  questions,  except  the  determination  of  prices,  should 
rest  always  with  the  chairman,  the  other  members  acting  in  a  coopera- 
tive and  advisory  capacity.  The  further  organization  of  advice  I  will 
indicate  below. 

In  the  determination  of  priorities  of  production  when  it  is  not  possi- 
ble to  have  full  supply  of  any  article  that  is  needed  procured  at  once, 
the  chairman  should  be  assisted  and,  so  far  as  practicable,  guided  by 
the  present  priorities  organization  or  its  equivalent. 

In  the  determination  of  priorities  of  delivery,  when  they  must  be 
determined,  he  should  be  assisted  when  necessary,  in  addition  to  the 
present  priorities  organization,  by  the  advice  and  cooperation  of  a  com- 
mittee constituted  for  the  purpose  and  consisting  of  official  representa- 
tives of  the  Food  Administration,  the  Fuel  Administration,  the  Railway 
Administration,  the  Shipping  Board,  and  the  War  Trade  Board,  in 


THE  WAR  INDUSTRIES  BOARD  33 

order  that  when  a  priority  of  delivery  has  been  determined  there  may 
be  common,  consistent,  and  concerted  action  to  carry  it  into  effect. 

In  the  determination  of  prices  the  chairman  should  be  governed  by 
the  advice  of  a  committee  consisting,  besides  himself,  of  the  members 
of  the  Board  immediately  charged  with  the  study  of  raw  materials  and 
of  manufactured  products,  of  the  labor  member  of  the  Board,  of  the 
chairman  of  the  Federal  Trade  Commission,  the  chairman  of  the  Tariff 
Commission,  and  the  Fuel  Administrator. 

The  chairman  should  be  constantly  and  systematically  informed  of 
all  contracts,  purchases,  and  deliveries,  in  order  that  he  may  have 
always  before  him  a  schematized  analysis  of  the  progress  of  business 
in  the  several  supply  divisions  of  the  Government  in  all  departments. 

The  duties  of  the  chairman  are — 

(1)  To  act  for  the  joint  and  several  benefits  of  all  of  the  supply 
departments  of  the  Government ; 

(2)  To  let  alone  what  is  being  successfully  done  and  interfere  as 
little  as  possible  with  the  present  normal  processes  of  purchase  and 
delivery  in  the  several  departments ; 

(3)  To  guide  and  assist  wherever  the  need  for  guidance  and  assist- 
ance may  be  revealed;  for  example,  in  the  allocation  of  contracts,  in 
obtaining  access  to  materials  in  any  way  preempted,  or  in  disclosure  of 
sources  of  supply ; 

(4)  To  determine  what  is  to  be  done  when  there  is  any  competitive 
or  other  conflict  of  interest  between  departments  in  the  matter  of  sup- 
plies ;  for  example,  when  there  is  not  a  sufficient  immediate  supply  for 
all  and  there  must  be  a  decision  as  to  priority  of  needs  or  delivery,  or 
when  there  is  a  competition  for  the  same  source  of  manufacture  or 
supply,  or  when  contracts  have  not  been  placed  in  such  a  way  as  to 
get  advantage  of  the  full  productive  capacity  of  the  country ; 

(5)  To  see  that  contracts  and  deliveries  are  followed  up  to  where 
such  assistance  as  is  indicated  under  (3)  and  (4)  above  has  proved 
to  be  necessary ; 

(6)  To  anticipate  the  prospective  needs  of  the  several  supply  de- 
partments of  the  Government  and  their  feasible   adjustment  to  the 
industry  of  the  country  as  far  in  advance  as  possible,  in  order  that 
as  definite  an  outlook  and  opportunity  for  planning  as  possible  may 
be  afforded  the  business  men  of  the  country. 

In  brief,  he  should  act  as  the  general  eye  of  all  supply  departments 
in  the  field  of  industry. 

Cordially  and  sincerely,  yours, 

WOODROW  WILSON. 
HON.  BERNARD  M.  BARUCH. 


34  THE  GIANT  HAND 

It  was  typical  of  Mr.  Baruch  that  on  the  very  day  he  re- 
ceived this  letter  from  the  President  he  wrote  to  Mr.  Alexander 
Legge,  his  chief  assistant  in  the  War  Industries  Board,  invest- 
ing him  with  this  same  authority.  Legge,  who  was  vice-presi- 
dent and  general  manager  of  the  International  Harvester 
Company,  served  to  the  end  as  assistant  chief  of  the  War 
Industries  Board.  A  perusal  of  the  President's  letter  will  show 
one  how  easily  Baruch  might  have  set  himself  up  personally 
as  the  dictator  over  war  industry,  how  easily  he  could  have 
insisted  that  the  War  Industries  Board  function  exclusively 
through  himself.  Perhaps,  indeed,  that  was  the  natural  thing 
to  do.  There  was  plenty  of  precedent  for  it  among  the  other 
emergency  war  organizations  which  the  Government  had  set 
up,  and  the  President's  letter  expressly  stated  that  the  deci- 
sion of  all  questions,  except  the  one  of  prices,  was  to  rest  with 
the  chairman  alone,  even  exempting  the  other  members  of  the 
Board  from  the  exercise  of  powers;  but  that  was  not  the 
Baruch  way.  Technically,  perhaps,  he  alone  possessed  the 
power:  in  practice  every  functionary  of  the  Board  wielded 
whatever  powers  he  needed. 

For  a  brief  time  after  it  received  its  grant  of  power,  the 
War  Industries  Board  continued  to  exist  as  a  body  nominally 
within  and  subordinate  to  the  Council  of  National  Defense. 
But  its  position  there  was  anomalous.  It  possessed  all  power 
over  industry:  the  Council  possessed  no  executive  authority 
whatsoever.  The  Board  soon  discovered  that  it  was  cramped 
by  this  limitation;  and  by  executive  order  of  May  28,  1918, 
it  was  formally  separated  from  the  Council  and  made  an 
independent  organization.  It  was  independent,  yet  closely 
interknit  with  all  the  other  producing  and  administrative  agen- 
cies of  the  War  Government.  It  was  the  unifying  organization 
for  industry.  The  Food  Administration  depended  upon  it  for 
tin  for  food  containers,  for  fertilizers  and  tools  for  the  farms, 
and  for  machinery  for  the  food-packing  establishments.  The 
Fuel  Administration  looked  to  it  for  mining  machinery  and 
for  priorities  upon  which  it  delivered  coal.  The  Railroad  Ad- 
ministration was  guided  by  its  traffic  priority  decisions,  and 


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THE  WAR  INDUSTRIES  BOARD  35 

also  depended  upon  it  for  steel  and  for  rails,  locomotives,  and 
rolling  stock.  The  War  and  Navy  Departments  leaned  heavily 
upon  it  in  the  tremendous  production  of  munitions ;  and  indus- 
try as  a  whole  found  in  it  the  agency  that  at  last  brought  about 
coordination  of  the  entire  effort  in  war  materials.  The  effective 
duration  of  the  Board's  existence  was  only  six  months;  but 
they  were  six  of  the  most  crowded,  momentous,  and  vital 
months  in  American  history. 


CHAPTER  III 
PRIORITY 

PETROLEUM  in  the  United  States  used  to  mean  prin- 
cipally kerosene.  Kerosene  illuminated  the  houses  of 
the  nation,  except  the  minority  in  the  larger  towns  and 
cities.  Gasoline  melted  lead  for  plumbers,  lit  circus  tents  at 
night  and  the  street  shows  of  itinerant  corn  doctors,  and  pro- 
vided cool  kitchen  stoves  for  progressive  housewives  in  sum- 
mer. These  uses  for  two  products  of  crude  oil,  with  something 
to  be  said  for  axle  grease  and  paraffine  candles,  virtually  de- 
fined the  consumption  of  petroleum  in  the  United  States. 
Since  whole  sections  of  our  terra  firma  fairly  floated  upon 
subterranean  lakes  of  oil,  the  national  consumption  could  not 
begin  to  equal  the  supply  in  sight  or  easily  tapped,  and  the 
price  of  petroleum  and  its  products  fell  low. 

Then  science  and  invention  began  discovering  almost  innu- 
merable uses  for  the  products  of  petroleum — uses  in  medicines, 
in  perfumes,  in  dyes,  in  explosives,  for  surfacing  country  roads, 
as  material  for  city  pavements,  as  lubricants  for  machinery, 
but  above  all  as  the  fuel  for  internal-combustion  engines, 
either  the  oil-burning  engines  of  ships  or  the  gasoline-burning 
engines  of  automobiles  and  airplanes.  From  an  obscure  and 
even  derided  product  less  than  a  century  ago,  petroleum  be- 
came king  of  the  earth's  minerals.  The  diversity  of  its  employ- 
ment resulted  in  an  enormously  increased  per  capita  con- 
sumption. 

For  a  long  time  the  exploitation  of  the  oil  fields  kept  pace 
with  the  increase  in  the  use  of  petroleum,  and  the  prices  re- 
mained correspondingly  low.  But  inevitably  the  motorization 
of  all  sorts  of  vehicles  outstripped  the  well  drillers,  and — more 


PRIORITY  37 

important — the  end  of  the  supposedly  unlimited  American 
supply  of  flowing  oil  came  in  sight;  and  then  the  users  of 
petroleum,  no  longer  secure  in  the  existence  of  oil  enough  for 
all,  began,  consciously  or  unconsciously,  to  bid  against  each 
other  for  what  amounted  to  preferential  treatment;  to  bid  for 
first  access  to  the  now  insufficient  supply  of  petroleum — in 
short,  to  bid  for  priority.  One  result  of  that  competition  is 
reflected  in  the  present  high  prices  which  motorists  pay  for 
gas. 

This  is,  to  be  sure,  but  another  recrudescence  of  our  ancient 
economic  friend,  the  law  of  supply  and  demand ;  but  priority, 
that  new,  that  life-saving  word  of  the  World  War,  sometimes 
cuts  no  figure  in  matters  of  supply  and  demand.  If  the  avail- 
able supply  of  a  commodity  exceeds  the  demand,  then  there  is 
no  question  of  priority  involved  in  that  supply :  priority  enters 
as  a  factor  only  when  the  supply  is  limited.  Sometimes  a  heavy 
demand  has  the  eventual  result  of  diminishing  the  priority 
factor  and  consequently  of  reducing  prices.  The  demand  for 
the  Ford  automobile  made  it  cheap  by  enabling  the  producer 
to  expand  his  plant  and  employ  the  methods  of  mass  produc- 
tion. The  demand  for  kerosene  oil  in  the  first  place  reduced  its 
price  to  a  low  mark  by  stimulating  the  development  of  new 
oil  fields.  It  is  only  when  supplies  cannot  be  readily  expanded 
and  demand  is  heavy  that  priority  enters  as  an  element  and 
prices  go  up.  In  paying  such  an  increased  price — in  paying  the 
excess  above  normal — one  pays  for  preferred  access  to  the 
supplies — for  priority.  And  wherever  you  find  enhanced  prices 
you  find  the  factor  of  priority.  The  man  who  eats  Christmas 
strawberries  pays  for  them  the  June  price  plus  (with  a  con- 
siderable allowance  for  increased  shipping  charges)  the  charge 
for  his  priority,  since  at  Christmas  there  are  not  enough  straw- 
berries for  all.  Preferred  stock  is  usually  worth  more  than 
common  stock,  because  the  preferred  has  first  call  upon  the 
corporation's  earnings. 

Now  it  is  evident  that  the  exercise  of  priority  is  one  of  the 
most  fundamental  rights  in  American  business,  and  hence  one 
of  the  fundamental  American  liberties.  Any  interference  with 


38  THE  GIANT  HAND 

this  right  is  a  flagrant  invasion  of  liberty  as  we  know  it  to-day. 
And  yet  when  the  Government  undertook  the  control  of  indus- 
try during  the  war,  one  of  its  first  acts  was  to  take  charge  of 
this  right  of  priority,  to  control  it,  and  to  direct  and  adminis- 
ter it.  It  was  equivalent  to  a  declaration  of  martial  law  in 
industry,  and  liberty  fled  from  American  mines  and  work- 
shops before  the  Government's  assertion  of  eminent  domain. 

No  war  necessity  was  more  exigent  than  this  control.  In 
normal  times  and  until  the  events  following  1914  interfered 
with  its  development,  American  industry  kept  half  a  step 
ahead  of  the  increase  in  population  and  the  consuming  power 
of  the  nation.  Indeed,  this  slight  excess  of  facilities  and  mate- 
rials above  domestic  needs  was  charged  by  some  with  respon- 
sibility for  the  periodic  depressions  which  fell  upon  American 
industry,  and  hence  arose  great  argument  for  the  expansion 
of  American  foreign  trade  to  consume,  and  an  American  mer- 
chant marine  to  carry  away,  the  surplus  of  American  products. 
Agreed,  rejoined  the  free  traders;  but  how  are  you  going  to 
maintain  a  merchant  marine  and  a  protective  tariff  simul- 
taneously1? Your  shipping  companies  will  fail  if  their  vessels 
can  carry  loads  only  one  way.  Reduce  the  tariff,  answered  the 
protectionists,  and  you  flood  America  with  cheap  foreign  goods 
and  thus  destroy  the  thing  you  pretend  to  be  protecting.  And 
so  raged  the  most  interminable  and  inconclusive  of  American 
political  debates — the  tariff  question.  The  tariff  occurs  as  an 
issue  only  in  countries  which  have  these  producing  excesses; 
in  countries  in  which  questions  of  priority  are  not  imperative, 
because  there  are  producing  facilities  enough  for  all. 

After  April  6,  1917,  what  had  been  at  least  a  national 
adequacy  became  an  acute  national  shortage.  War  enormously 
increased  the  demand  upon  practically  all  materials  and  all 
manufacturing  facilities.  If  the  demand  was  not  for  the  thing 
made,  it  was  for  the  materials  from  which  things  are  made. 
Thus,  the  demand  for  pianos  did  not  rise  greatly  during  the 
war;  but  pianos  increased  in  price,  because  labor,  wood,  wire, 
iron,  felt,  ivory,  and  all  the  other  materials  which  enter  into 


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PRIORITY  39 

piano  manufacture,  were  in  demand  for  the  making  of  other 
articles  which  had  direct  relationship  to  the  war. 

It  would  not  have  been  so  bad,  had  the  demand  all  come 
from  a  single  source;  but  the  Government  was  not  a  single 
source  of  demand.  Politically  the  United  States  was  a  unit: 
as  a  war  buyer  of  the  products  of  industry,  it  became  a  hun- 
dred units,  all  competing  with  each  other.  The  Army,  the 
Navy,  the  Railroad  Administration,  the  Shipping  Board,  the 
Food  and  Fuel  Administrations,  and  the  Red  Cross  were  all 
part  of  the  Government,  but  all  were  buyers;  and  most  of 
them  had  jealous  and  semi-independent  purchasing  bureaus, 
which  in  turn  had  their  district  offices.  If  they  were  not  all 
trying  to  secure  the  same  finished  products,  they  were  at  least 
competing  for  the  same  raw  materials  which  went  into  the 
products  and  the  same  machinery  for  turning  them  out.  Half 
a  dozen  of  the  Allies,  represented  in  America  by  purchasing 
bureaus,  were  competing  for  these  same  materials  and  facili- 
ties. Everyone  wanted  everything  right  away,  and  money  was 
no  object,  since  every  official  purchaser  apparently  had  un- 
limited supplies  of  money  and  was  willing  to  spend  it  to  gain 
first  access  to  the  facilities  of  industry. 

These  facilities  were  not  enough  to  go  around.  There  was 
not  enough  iron  ore  available,  not  enough  copper,  not  enough 
timber,  not  enough  furnaces  and  smelters  and  converters,  not 
enough  factory  space,  not  enough  machinery,  not  enough 
transportation,  not  enough  labor,  to  satisfy  all  the  demands. 
The  official  purchasing  agencies  began  bidding  against  each 
other  for  the  facilities,  and  the  cost  of  priority  was  registered 
in  the  toplofty  prices  to  which  almost  all  commodities  went. 

There  were  three  ways  by  which  to  control  the  situation. 
One  was  to  regulate  the  demand — but  a  nation's  war  demands 
do  not  admit  of  argument.  "We  have  got  to  have  ten  million 
shell  and  ten  thousand  guns  and  all  the  shoes  in  the  world," 
say  the  troops,  between  shots  and  stabs.  The  war  demand  of  a 
country  is  everything  it  can  get,  and  it  must  supply  its  needs 
to  its  maximum  capacity  or  go  under.  A  second  way  was  to 
increase  supply — but,  while  it  was  understood  that  every 


40  THE  GIANT  HAND 

effort  would  be  made  to  increase  supply,  it  was  clear  that  this 
would  take  time  and  that  the  increase  would  never  equal 
the  demand,  particularly  as  labor  was  steadily  to  be  weakened 
by  the  withdrawal  of  men  for  the  Army  and  Navy.  The  most 
practical  and  immediately  beneficial  thing  to  do  was  to  put 
the  essential  war  interests  on  rations  by  dictating  their  priority 
of  access  to  the  limited  facilities,  and  also  by  controlling  the 
priorities  of  the  essential  civilian  demands;  and  this  third 
course  was  the  one  which  the  Government  chose. 

Incidentally,  but  only  incidentally,  the  control  of  priorities 
had  a  bearing  upon  the  stabilizing  of  prices,  of  which  more 
will  be  said  later.  Prices,  however,  were  not  generally  of  sur- 
passing importance  in  the  business  of  procuring  war  supplies. 
Reduced  to  its  lowest  terms,  the  supply  question  was  just 
this — America  possessed  resources  in  sufficient  quantities  to 
win  the  war,  and  she  was  not  going  to  be  deterred  from  using 
them  by  any  prices,  however  fantastic,  even  if  steel  went  to 
a  thousand  dollars  a  ton  and  wool  to  a  hundred  dollars  a 
pound.  As  long  as  the  Government  had  plenty  of  printing 
presses  and  orators,  it  could  turn  out  Liberty  Bonds,  and  sell 
them,  too;  for  on  the  upward  climb  wages  and  salaries  were 
bound  to  trail  along  behind  prices.  Inflated  prices,  however, 
if  allowed  to  go  too  far,  would  have  vastly  complicated  the 
Government's  business  arrangements,  and  would  have  resulted 
in  an  inflated  currency,  which  in  turn  would  have  brought  dis- 
proportionate costs  to  America  and  a  train  of  other  evils,  from 
which,  according  to  the  degree  of  their  severity,  the  nation 
might  have  been  years  in  recovering,  or  which  might  even 
have  brought  the  country's  economic  structure  down  with 
a  crash.  Therefore  the  War  Industries  Board  fixed  the  chief 
prices,  as  we  shall  see;  and  the  control  of  industrial  priorities 
was  of  great  assistance  in  that  effort.  The  minute  you  remove 
competition  from  among  the  purchasers  and  institute  it  among 
the  producers,  that  moment  you  remove  from  the  producers 
the  power  to  control  prices.  If  an  independent  oil  producer 
can  sell  his  oil  only  to  the  Standard  Oil  Company,  he  must 
accept  what  the  Standard  chooses  to  pay  or  else  close  down. 


PRIORITY  41 

The  control  of  priorities  gave  a  purchasing  monopoly  to  each 
official  bureau  upon  the  facilities  assigned  to  it,  and  the  pro- 
ducers thus  assigned  were  forbidden  to  turn  elsewhere  for  a 
customer,  or  to  refuse  to  produce  for  the  lone  customer,  upon 
pain  of  having  their  properties  commandeered.  The  result  was 
that,  after  priority  was  under  control,  prices  of  commodities 
tended  to  be  based  more  upon  production  costs. 

But,  after  all,  the  fundamental  consideration  was  the  mate- 
rials and  facilities  themselves,  and  not  the  prices  paid  for  the 
products.  The  Government  had  to  take  it  into  its  own  hands 
to  see  that  every  essential  need  secured  access  to  the  ministra- 
tions of  industry,  and  that  not  one  was  left  out.  This  meant 
that  not  one  principal  war  demand  was  completely  supplied, 
but  that  all  were  partially  supplied,  each  in  proportion  to  its 
relative  importance.  There  had  to  be  some  superior  agency  to 
determine  the  questions  of  relative  importance,  for  the  gov- 
ernment supply  bureaus  were  themselves  unable  to  determine 
them. 

Men  are  invariably,  and  quite  naturally,  prejudiced  in 
favor  of  their  own  work.  In  war,  the  more  you  can  convince  a 
soldier  or  sailor  that  his  is  the  one  big,  vital,  dominating  job, 
the  failure  of  which  will  mean  defeat,  the  quicker  the  war  is 
won.  And  apparently  every  last  man  in  the  service  of  Uncle 
Sam  learned  that  lesson — that  his  was  the  one  big  job.  Conse- 
quently, his  was  the  one  big  need,  and  he  was  going  to  see  that 
need  filled  if  he  could,  though  the  heavens  fell.  The  manu- 
facturer of  optical  instruments,  who  was  told  that  the  Navy 
could  not  fight  without  range  finders,  naturally  believed  that 
he  needed  brass  worse  than  anyone  else.  But  the  fuse  maker  had 
been  told  that  the  Army  could  not  fight  without  shell  fuses; 
and  he  as  confidently  believed  that  his  need  of  brass  tran- 
scended any  and  every  other  need  for  it.  What  did  he  know 
about  range  finders'?  Meanwhile  the  Shipping  Board  had  told 
someone  else  that  without  compasses  and  sextants  none  of  the 
new  ships  could  go  across;  and  of  course  the  man  who  made 
compasses  and  sextants  decided  that  no  other  demand  for  brass 


42  THE  GIANT  HAND 

was  as  important  as  his.  What  did  he  know  about  range  finders 
or  fuses'? 

Left  without  direction,  the  war  industry  might  have  built 
up  on  the  Atlantic  seaboard  an  enormous  supply  of  field  artil- 
lery, only  to  find  that  there  were  no  ships  to  take  the  artillery 
to  France.  Or  it  might  have  built  the  ships  and  had  nothing 
to  load  into  them.  It  might  have  built  ships  and  guns  and 
shell  at  the  expense  of  wire,  only  to  find  that  its  artillery  was 
helpless  until  the  industry  could  produce  the  wire  that  would 
put  the  field  batteries  in  communication  with  headquarters. 
Every  war  supply  was  important;  but  there  had  to  be  some 
superior  agency  with  power  to  distinguish  the  merely  impor- 
tant from  the  more  and  the  most  important,  and  to  enforce 
its  decrees;  someone  to  devise  a  system  whereby  the  various 
supplies  could  assert  their  relative  importance  more  or  less 
automatically;  someone  to  see  to  it  that  the  wire  was  braided 
as  the  field  gun  was  produced,  and  that  both  mariners  and 
airplane  observers  were  equipped  with  optical  instruments. 
That  someone  was  the  priorities  commissioner  of  the  War 
Industries  Board,  Judge  Edwin  B.  Parker. 

Much  of  the  industrial  priorities  system  was  devised,  and 
most  of  it  administered,  by  Judge  Parker.  He  was  a  typical 
Baruch  appointment.  The  judge  (his  title  was  honorary;  al- 
though an  eminent  lawyer,  a  member  of  a  leading  Texas  legal 
firm,  he  had  never  served  on  the  bench)  was  essentially  a 
diplomat;  and  he  had  to  be  one.  His  job  was  to  throw  monkey 
wrenches  into  the  machinery  of  normal  business  and  at  the 
same  time  to  encourage  its  operators  to  keep  the  machinery 
running  even  more  smoothly  and  swiftly  than  before.  To  do 
that  required  tact  and  adaptability  to  the  natures  of  men, 
and  Judge  Parker  had  those  qualities.  Priority  decrees  were 
tremendous  interferences  with  individual  freedom,  and  it  was 
not  unusual  for  one  of  these  orders  to  stir  up  an  immense 
amount  of  anger  and  passion.  Judge  Parker  alone  stood  be- 
tween the  governmental  purchasers  and  the  industrial  pro- 
ducers and  cheerfully  bore  the  brunt  of  the  wrath  of  both. 
He  could  endure  it  cheerfully  because  he  was  that  sort  of  a 


Photo  by  Harris  &  Ewing 


EDWIN  B.  PARKER 


PRIORITY  43 

man — exactly  the  peg  to  fit  that  particular  hole.  Urbanity,  a 
temper  as  hard  to  ruffle  as  his  sense  of  humor  was  easy  to  stir, 
deliberate  and  measured  speech,  moderation  in  phrase  and 
nicety  in  enunciation,  courteousness  toward  another  man's 
ideas  even  though  they  conflicted  with  his  own — in  sum,  a 
personality  disarming  to  the  angry,  encouraging  to  the  timid, 
soothing  to  the  ruffled,  and  confidence-inspiring  to  the  distrust- 
ful— and,  above  all,  a  supreme  belief  in  the  integrity  and 
necessity  of  his  own  work — these  were  the  endowments  of 
the  priorities  commissioner. 

It  was  Judge  Parker's  practice,  as  far  as  he  could  follow  it, 
to  keep  the  key  turned  in  the  door  of  the  closet  which  con- 
cealed the  spectre  of  absolute  power,  and  to  win  his  way  with 
reason;  and  he  was  usually  successful.  If  it  were  possible  to 
compile  a  composite  of  dozens  of  interviews  that  occurred 
in  his  office,  the  conversation  would  run  about  as  follows: 

We  will  say  that  the  complainant  is  a  manufacturer  of 
steam  radiators  for  heating  dwellings.  A  priority  order  has 
cut  off  some  of  his  supplies  of  pig  iron.  He  has  come  to  Wash- 
ington with  blood  in  his  eye,  all  set  to  tell  the  theorists  who 
are  running  the  War  Government  something  about  the  prac- 
tical side  of  modern  business.  He  wastes  no  time  getting 
about  it. 

"Look  here,  Judge  Parker,"  he  storms,  "this  new  order 
of  yours — do  you  realize  what  it's  going  to  do  to  me?  Don't 
you  know  that  people  have  to  keep  warm,  even  if  there  is  a 
war?  What  do  you  want  us  to  do — freeze*?" 

"Why,  no;  of  course  not,"  concedes  Judge  Parker,  looking 
impressed. 

The  manufacturer  is  somewhat  mollified,  but  still  severe. 
"Well,  that's  just  what  your  order  is  going  to  do  to  us.  And 
look  where  it  leaves  me.  I  can't  get  along  with  the  iron  you've 
given  me.  If  you're  doing  this  right  through,  how  do  you 
expect  business  to  live"?  How  are  we  manufacturers  to  pay 
taxes  and  buy  bonds  and  make  war  contributions,  if  we  can't 
get  materials  to  work  with*?  I  regard  this  whole  thing  as  an 
outrageous  interference  with  business.  And  don't  get  me 


44  THE  GIANT  HAND 

wrong — I'm  for  winning  the  war  all  right;  but  what's  the  use 
of  winning,  if  all  business  is  going  to  pot  in  the  meantime*?" 

"Not  much  use,  that's  sure,"  agrees  the  commissioner. 

"There!  I  knew  you  would  listen  to  reason,"  declares  the 
visitor,  rapidly  cooling  off.  "When  you  see  the  practical  side 
of  these  things,  it's  different,  isn't  it"?  Now  I  can  get  along 
with  about  twice  as  much  iron  as  you've  given  me.  Suppose 
you  sign  a  new  order  to  that  effect." 

"What  do  you  want  all  that  iron  for1?"  inquires  Judge 
Parker. 

"Just  as  I've  told  you — to  make  radiators  with,  to  keep 
business  going,  to — to — " 

The  explosion  is  over,  and  there  is  no  fight. 

"Well,  before  we  make  up  our  minds,"  begins  the  priorities 
commissioner,  taking  the  floor,  "let's  look  at  the  other  side, 
too.  Now  here  we  are  in  a  war — with  a  million  men  in  France 
and  another  on  the  way.  We've  got  to  win,  but  we  can't  win 
without  making  sacrifices.  Pershing  is  calling  for  more  ships, 
and  more  motor  trucks,  and  more  guns,  and  more  shell.  We 
can't  make  enough  of  anything  to  satisfy  him.  And  the  boys 
over  there  have  got  to  have  food  and  clothing,  and  they  can't 
get  them  unless  there  are  railroad  cars  to  haul  them.  If  we 
win  this  war,  we  will  win  it  mainly  with  steel.  Steel  has  a 
share  in  everything — if  it  doesn't  go  into  the  supplies  them- 
selves, it  takes  the  supplies  where  they  will  do  the  most  good. 

"And  there  isn't  enough  steel  to  go  round — not  nearly 
enough — not  enough,  if  we  turned  every  bit  of  it  purely  to 
war  purposes.  Why,  we  could  develop  our  ore  mines  for  the 
next  fifty  years  and  still  not  get  producing  capacity  that  would 
satisfy  us  for  the  next  few  months  alone.  Let  me  tell  you  how 
bad  it  is.  Right  here  in  America  women  are  at  work  in  the  iron 
mines  to  make  production  go  faster.  They  have  sons  and 
husbands  and  brothers  in  the  A.  E.  F.,  and  they  know  that  the 
only  way  for  them  to  get  their  men  back  again  is  to  send  them 
plenty  of  steel.  Man,  I  wish  I  had  a  million  tons  of  iron  to 
give  you,  but  I  haven't.  So  I  am  going  to  leave  this  thing  to 
you,  and  I  will  abide  by  your  honest  judgment.  Which  do  you 


PRIORITY  45 

think  is  the  more  important :  to  give  the  Army  and  Navy  that 
much  more  steel,  or  to  provide  a  few  civilians  here  in  this 
country  with  new  radiators ;  to  indulge  our  own  comfort  here, 
or  to  add  to  the  comfort  and  safety  and  power  of  the  boys  in 
France?  Isn't  this  what  you  really  want — to  cut  down  your 
own  production  of  radiators  so  that  some  of  your  men  can 
go  into  the  munitions  factories  to  make,  with  the  steel  you  give 
up,  a  few  more  tons  of  steel  that  can  be  shot  across  into  the 
German  lines'?  What  about  it4?" 

"By  George,  Judge,  you're  right!"  exclaims  the  manu- 
facturer. "I  expect  I  have  made  a  holy  show  of  myself.  But 
out  in  the  country  we  don't  understand  these  things — we  don't 
realize  how  serious  the  situation  is.  I'm  mighty  glad  I  had  this 
talk  with  you — it  has  opened  my  eyes.  We'll  leave  things 
just  as  they  were,  and  I'm  going  back  to  my  shop  to  get  along 
with  what  you  give  me,  and  you  can  count  on  me  after  this." 

The  machine  which  administered  the  priorities  system  con- 
sisted of  a  Priorities  Board  and  a  Priorities  Committee,  the 
former  to  determine  broad  plans  and  policies,  the  latter  to 
carry  them  out.  One  of  the  first  acts  of  the  Priorities  Board 
was  to  publish  its  Preference  List  No.  7,  a  list  of  forty-five 
classes  of  industries,  the  operation  of  which  was  deemed  to  be 
of  exceptional  importance  to  the  Government,  and  which  were 
automatically  to  be  accorded  priority  in  the  obtaining  of  mate- 
rials and  machinery.  A  few  weeks  later  (in  September,  1918) 
the  Board  issued  Preference  List  No.  2.  This  was  more  specific. 
It  named  over  7,000  individual  manufacturing  plants  in 
seventy-three  branches  of  industry,  the  plants  being  rated 
either  higher  or  lower  in  war  importance  than  their  respective 
branches  of  industry.  These  lists  gave  the  Priorities  Commit- 
tee its  general  rules  and  specific  directions.  Industrial  work 
was  embraced  within  five  ratings  or  classes,  called  Class  AA, 
Class  A,  Class  B,  Class  C,  and  Class  D,  Class  AA  being  of 
greatest  importance  and  Class  D  of  least. 

Industry  was  at  first  aghast  that  any  outside  agency,  govern- 
mental or  other,  should  presume  to  dictate  the  order  of 
processes  within  its  plants.  As  one  irate  manufacturer  put  it : 


46  THE  GIANT  HAND 

"I'll  go  out  of  business  before  I'll  let  them  come  into  my  shop 
and  run  it  and  tell  me  what  to  make  when,  and  when  to  make 
what.  What  does  the  Government  know  about  factory  work 
schedules'?" 

The  answer  was,  "Nothing";  and  the  priorities  commis- 
sioner was  not  trying  to  mix  in  with  shop  details.  What  he 
was  doing  was  administering  a  system  in  which  contracts  and 
orders  were  segregated  into  classes,  and  demanding  of  indus- 
try that  it  give  precedence  to  Class-A  orders  over  Class-B 
orders  in  their  deliveries  of  finished  supplies,  to  Class-B  orders 
over  Class-C,  and  so  on.  With  reference  only  to  their  de- 
liveries, mind  you.  Suppose  there  was  a  wooden-wheel  factory 
engaged  upon  contracts  for  the  production  of  artillery  wheels, 
wagon  wheels,  and  pushcart  wheels.  In  the  preference  list  the 
artillery  wheels  would  have  A  rating,  the  wagon  wheels  B 
rating,  and  the  pushcart  wheels  C  rating.  It  was  entirely  pos- 
sible for  that  factory  to  abide  by  the  priority  regulations  and 
still  manufacture  its  C  wheels  first,  its  B  wheels  second,  and 
its  A  wheels  last — provided  that  the  priority  delivery  dates 
were  met.  Judge  Parker  was  not  concerned  with  factory 
processes,  so  long  as  the  artillery  wheels  were  delivered  on 
time,  followed  by  the  wagon  wheels  on  time,  followed  finally 
by  the  pushcart  wheels.  But  if  anything  happened  in  the  fac- 
tory— any  difficulties  in  getting  labor  or  materials,  for  in- 
stance— then  the  manufacturer  had  to  concentrate  upon  and 
give  preference  to  the  artillery  wheels  at  the  expense  of  the 
other  two  sorts,  favoring,  too,  the  wagon  wheels  above  the 
pushcart  wheels.  If  the  manufacturer  would  not  follow  the 
priority,  or  if  he  maintained  that  he  could  not,  then  he  found 
himself  unable  to  get  materials. 

What  compulsion  was  upon  manufacturers  to  observe  the 
priority  schedules?  Judge  Parker  (and  you  may  be  sure  the 
grave  eyes  twinkled  brightly  as  he  spoke)  maintained  stoutly 
that  "We  never  used  any  compulsion.  Of  course,  if  a  man 
didn't  like  the  priority  schedule  and  didn't  want  to  play  with 
us,  he  found  he  couldn't  get  any  fuel  or  any  railroad  cars  or 
any  materials  or  any  labor  or  anything;  but  we  never  used  any 


Photo  from  Standard  Fcrgings   Company 

MACHINING  BIG  GUN  FORGINGS 


Photo  from  Ordnance  Department 

FINISHING  BIG  GUNS  FOR  U.  S.  FORCES 


PRIORITY  47 

compulsion.  The  man  was  a  free  agent."  The  control  of  all 
these  facilities  was  in  the  hands  of  the  Government.  Yet  it 
was  seldom  necessary  to  apply  punitive  orders.  Most  men  in 
industry  welcomed  the  application  of  controlled  priority  as 
an  effective  war  measure;  and  many  of  those  who  at  first 
objected  to  it,  later  gave  their  willing  adherence  to  the  sys- 
tem, once  they  understood  that  the  system  did  not  mean  inter- 
ference with  manufacturing  processes,  but  was  only  to  be 
guidance  for  the  producers  in  what  the  Government  had  to 
have  first.  Let  it  be  repeated  that  it  was  this  willingness  on  the 
part  of  manufacturers  that  made  the  control  of  war  industry 
a  success.  Had  the  producers  resisted,  it  might  have  been  diffi- 
cult to  apply  war  powers  which  were  not  explicitly  stated  in 
written  law. 

During  the  war  much  idle  talk  was  to  be  heard  about  essen- 
tial and  nonessential  industries,  and  there  were  zealots  who 
urged  that  businesses  not  necessary  to  the  prosecution  of  the 
war  should  be  closed  up  entirely  in  order  to  allow  all  effort 
to  flow  in  purely  martial  channels.  The  War  Industries  Board 
adopted  no  such  point  of  view.  It  regarded  all  going  concerns 
as  essential — the  fact  that  they  could  exist  being  proof  that 
they  were  necessary  to  the  well-being  of  people.  They  were 
essential  to  their  employees,  if  to  no  one  else.  A  man  skilled 
only  in  the  making  of  flutes  or  the  growing  of  flowers  was  as 
much  entitled  to  his  means  of  livelihood  as  any  other  man, 
war  or  no  war.  What  the  War  Industries  Board  attempted 
to  do  was  to  determine  the  essentiality  of  industries  relatively 
to  the  prosecution  of  the  war.  The  Board  found  it  necessary 
to  curtail  the  labor  and  materials  of  the  less  essential;  but 
whenever  such  curtailment  was  ordered,  the  manufacturer  was 
given,  if  possible,  opportunity  to  take  up  more  essential  war 
work,  and  on  such  terms  that  he  could  preserve  a  skeletal 
organization  for  his  own  proper  work  in  order  to  be  able  to 
resume  it  easily  after  the  advent  of  peace. 

Here  was  where  the  direction  of  priorities  entered — in  cur- 
tailing the  less  essential  manufacturer's  use  of  labor  and  mate- 
rials. And  in  this  arose  delicate  questions,  for  it  was  not  always 


48  THE  GIANT  HAND 

easy  to  determine  relative  essentiality.  Which  was  more  essen- 
tial, a  gun  factory  or  a  watch  factory1?  We  had  to  have  the 
guns,  but  we  also  had  to  have  accurate  timepieces  for  the  con- 
trolled eruptions  of  men  over  the  top,  following  a  rolling 
barrage.  Obviously  a  powder  factory  was  Class  AA  in  its 
priorities,  but  what  about  a  needle  factory*?  Without  certain 
important  textiles  in  his  equipment,  a  soldier  could  not  be  an 
efficient  soldier;  yet  it  required  needles  to  make  these  textiles, 
and  there  was  an  American  shortage  of  needles  throughout 
the  war.  War  industry  performed  extraordinary  exploits  in 
securing  needles  from  Norway  and  Japan.  The  priorities 
organization  had  to  know  such  circumstances  and  to  make  such 
distinctions.  If  there  had  been  but  a  few  industries  and  a  few 
plants,  the  task  would  have  been  easy,  but  there  were  scores 
of  classes  of  industries  and  thousands  of  factories,  besides 
thousands  of  war  needs,  and  it  was  necessary  to  rate  them  all. 
The  system  of  control,  to  be  successful,  had  to  enlist  under 
its  banner  the  unreserved  support  of  all  the  governmental 
agencies  controlling  the  necessities  of  industrial  life.  It  availed 
nothing  to  give  a  favored  industry  its  fuel  if  the  control  failed 
to  give  it  also  its  materials,  labor,  and  transportation  facili- 
ties. Moreover,  the  control  system  had  to  be  absolute  in  its 
power  or  go  down  as  a  failure.  Before  the  War  Industries 
Board  secured  its  power,  the  various  production  bureaus  of 
the  War  and  Navy  Departments  exerted  the  undoubted  right 
of  the  Government  to  commandeer  factories  or  their  outputs 
whenever  such  action  became  necessary.  To  have  continued 
that  course  after  the  War  Industries  Board  began  dictating 
priorities  would  have  invited  chaos  in  industry.  With  any- 
thing less  than  supreme  power  in  the  War  Industries  Board,  if 
a  production  bureau  of  the  War  Department  did  not  approve 
an  order  giving  the  Navy  or  Shipping  Board  priority  in  a 
plant,  it  might  commandeer  the  plant  outright  and  thus  cir- 
cumvent the  order  altogether.  Caught  between  two  such 
powers,  industry  would  not  have  known  which  way  to  turn. 
It  was  to  prevent  such  a  state  of  affairs  that  the  President, 
shortly  after  commissioning  the  Board  as  a  plenipotentiary 


PRIORITY  49 

body,  passed  the  order  down  through  the  War  Administration 
that  thereafter  no  federal  bureau,  department,  or  administra- 
tion was  to  commandeer  anything  except  upon  the  approval 
of  the  chairman  of  the  War  Industries  Board.  This  order 
placed  in  the  Board's  hands  the  whole  direction  of  industry, 
removed  from  the  War  and  Navy  Departments  their  hold 
upon  the  factories  of  the  nation,  and,  since  the  bureaus  which 
formerly  had  power  to  commandeer  were  all  represented  be- 
fore the  War  Industries  Board,  brought  about  an  approxi- 
mation of  justice  to  all  engaged  in  war  industry  as  either 
purchasers  or  producers. 

Priorities  were  under  control,  not  only  in  war  industry 
itself,  but  in  all  nonwar  industry  as  well.  It  is  obvious  that 
this  had  to  be.  All  plants  engaged  in  war  work  had  their 
ratings  according  to  the  importance  of  their  work.  The  less 
essential  ones  had  to  wait  for  their  materials  until  the  more 
essential  were  satisfied.  Yet  what  an  injustice  it  would  have 
been  to  the  less  essential  munitions  producer  to  deny  him  any- 
thing while  his  next-door  neighbor,  not  engaged  in  war  pro- 
duction at  all,  had  full  competitive  access  to  whatever  he 
needed !  Curtailment  and  economy  were  necessary  everywhere. 

It  was  an  interference  with  nonwar  industry  which  raised 
in  Congress  the  only  question  ever  debated  there  regarding  the 
activities  of  the  War  Industries  Board.  Judge  Parker  had 
issued  his  Circular  No.  21,  which  virtually  put  an  end  to 
all  nonwar  building  construction  in  the  United  States.  This 
did  not  mean  that  the  Board  intended  to  wipe  out  temporarily 
the  great  building-construction  industry  of  the  United  States. 
The  Government  itself,  in  its  needs  for  ships  and  shipyards 
and  for  war  buildings  for  Army  and  Navy,  offered  more  work 
to  be  done  than  the  entire  building  industry  of  the  country 
could  accomplish.  The  order  simply  diverted  all  this  effort 
to  purely  war  purposes.  The  cleverness  of  the  order  was  in  the 
exceptions  it  made — it  allowed  all  nonwar  construction 
projects  to  go  forward  if  they  received  the  approval  of  the 
local  councils  of  defense.  The  local  councils  were  inclined  to 
be  more  severe  in  their  judgments  than  the  organization  in 


50  THE  GIANT  HAND 

Washington,  and  precious  little  nonwar  building  construc- 
tion got  past  these  neighborhood  censors.  The  local  councils 
referred  their  decisions  to  the  Nonwar  Construction  Section 
of  the  War  Industries  Board,  the  chief  of  which,  Mr.  Donald 
R.  McLennan,  adopted  them  and  gave  them  the  authority 
of  law. 

To  get  back  to  the  building-construction  circular:  Its  pub- 
lication was  met  by  a  tremendous  protest  from  the  lumber 
industry,  the  cement  producers,  the  brickmakers,  the  jobbers 
and  retailers  of  building  materials,  and  the  building  trades- 
unions.  Senator  Calder  of  New  York  introduced  a  resolution 
in  the  Senate  calling  upon  the  War  Industries  Board  to  explain 
why  the  order  was  issued  and  by  what  authority.  In  support  of 
his  resolution,  Senator  Calder  said:  "I  introduce  this  resolu- 
tion because  articles  appearing  in  the  newspapers  within  the 
last  day  or  two  indicate  that  the  War  Industries  Board  has 
promulgated  orders  which,  in  effect,  will  completely  destroy 
the  building  industry  of  the  country.  The  building-material 
industry  of  the  country  has  an  investment  of  $4,000,000,000 
in  their  business,  and  the  new  buildings  constructed  in  the 
nation  in  the  last  prewar  year,  1916,  totaled  $1,800,000,000. 
As  I  understand  these  orders,  they  prevent  the  construction  of 
a  barn,  a  silo,  or  even  a  private  dwelling  house,  or  of  any 
building  of  a  private  character,  without  the  permission  of  the 
Federal  Government.  If  it  is  necessary  in  order  to  win  the  war 
to  destroy  this  great  wealth-  and  tax-producing  industry,  than 
which  it  seems  to  me  there  can  be  few  more  essential,  we  ought 
to  know  it  and  the  reason  for  it;  and  the  people  must  adjust 
themselves  to  it;  but  if  this  great  business  can  be  saved,  at 
least  in  part,  some  way  should  be  found  to  do  so."  The  Senate 
adopted  the  resolution. 

The  order  was  indeed  a  drastic  one.  It  was  against  the  pri- 
vate interests  of  a  large  share  of  the  population.  The  farmer 
who  wanted  to  build  a  new  barn,  the  bank  that  desired  new 
quarters,  the  railroad  which  wished  to  erect  a  new  terminal, 
the  county  which  planned  a  new  courthouse,  all  suffered  from 
the  order,  as  did  the  people  who  produced  and  distributed 


PRIORITY  51 

building  supplies.  But  they  did  not  suffer  in  silence.  They 
descended  upon  Washington  in  droves,  either  bodily  or 
through  the  medium  of  wires  and  mails;  and  throughout  the 
tempest  Judge  Parker  sat  steadfast  and  yielded  not  one  inch. 
It  was  the  liveliest  commotion  raised  by  the  War  Industries 
Board  during  the  war.  For  the  moment  it  drew  the  national 
spotlight  to  the  Board  and  gave  Chairman  Baruch  the  chance 
to  tell  the  country,  while  it  was  paying  attention,  something 
about  what  the  War  Industries  Board  was  trying  to  accom- 
plish, an  opportunity  which  he  was  not  slow  to  embrace.  His 
reply  to  the  Senate  resolution  was  as  follows: 

September  19,  1918. 

To  the  Honorable  the  President 

and  Senate  of  the  United  States, 
Washington,  D.  C. 

GENTLEMEN  : 

On  behalf  of  the  War  Industries  Board,  I  beg  to  comply  with 
Senate  Resolution  304,  passed  September  13,  1918,  and  transmitted  to 
me  the  same  day. 

1.  The   only   order   promulgated   by   the   War   Industries    Board 
"relative  to  construction  and  alteration  of  public  or  private  buildings," 
is  contained  in  Circular  No.  21,  issued  September  3,  1918,  and  supple- 
mented under  date  of  September  1O,  1918.  Copies  of  the  order  and  the 
supplement  are  attached  hereto. 

2.  Said  orders  were  issued  under  the  authority  conferred  upon  the 
War  Industries  Board  and  its  chairman  by  the  President  of  the  United 
States  in  a  communication  to  the  chairman,  dated  March  4,  1918,  and 
confirmed  by  executive  order  dated  May  28,  1918,  whereby  the  War 
Industries  Board  was  created  a  separate  administrative  agency  of  the 
President,  with  the  powers,  duties,  and  functions  set  forth  in  the  said 
communication  from  the  President  of  March  4,  1918.  Copies  of  said 
communication  and  of  said  executive  order  are  attached  hereto. 

I  beg  to  call  particular  attention  to  the  following  powers  and  duties 
thus  specifically  conferred  by  the  President  upon  the  Board  and  its 
chairman : 

a.  "The  studious  conservation  of  resources  and  facilities  by  scien- 
tific, commercial,  and  industrial  economies" ; 

b.  "The  determination,   wherever  necessary,   of  priorities   of  pro- 
duction and  of  delivery  and  of  the  proportions  of  any  given  article  to 


52  THE  GIANT  HAND 

be  made  immediately  accessible  to  the  several  purchasing  agencies  when 
the  supply  of  that  article  is  insufficient,  either  temporarily  or  perma- 
nently" ; 

c.  The  Chairman's  duty  to  guide  and  assist  "in  obtaining  access 
to  materials  in  any  way  preempted,"  and  "to  anticipate  the  prospective 
needs  of  the  several  supply  departments  of  the  Government  and  their 
feasible  adjustment  to  the  industry  of  the  country  as  far  in  advance 
as  possible,  in  order  that  as  definite  an  outlook  and  opportunity  for 
planning  as  possible  may  be  afforded  the  business  men  of  the  country." 

I  refer  also  to  the  act  of  Congress  of  August  10,  1917,  known  as  the 
Priority  of  Shipment  Act. 

3.     In  further  response  to  Senate  Resolution  304,  permit  me  to  add: 

Statement  of  Situation 

In  carrying  out  the  duties  with  which  we  were  thus  charged  by  the 
President,  the  War  Industries  Board  and  its  chairman  found  the  fol- 
lowing situation  to  exist  with  respect  to  building  and  construction 
facilities  and  supplies: 

a.  Iron  and  steel  are  a  necessary  part  of  every  completed  building. 
They  are  necessary  for  plumbing,  heating,  ventilating,  piping,  hard- 
ware, and  mechanical  equipment.  The  direct  and  indirect  war  needs  of 
this  country  and  of  our  Allies  for  the  last  six  months  of  the  current 
year  already  exceed  21,000,000  tons,  and  the  country's  total  output 
for  the  first  six  months  was  less  than  17,000,000  tons.  The  unavoidable 
result  is  that  iron  and  steel  can  not  be  used  for  nonwar  or  less  essential 
purposes. 

b.  The  United  States  Fuel  Administration,  finding  that  the  produc- 
tion of  building  materials  consumed  upwards  of  30,000,000  tons  of  fuel 
per  annum,  and  that  there  was  a  shortage  in  the  fuel  necessary  for 
our  war  program,  curtailed  very  materially  the  fuel  allowed  for  build- 
ing materials.   The   continued  production   of  building   materials   for 
nonwar  and  less  essential  projects  would  now  necessarily  be  at  the 
expense  of  production  which  our  war  program  requires. 

c.  The  Railroad  Administration  finds  that  25  per  cent  of  the  total 
tonnage  moved  by  the  railroads  is  building  material.  It  is  absolutely 
essential  that  the  portion  of  this  tonnage  which  represents  materials 
not  needed  for  war  or  essential  purposes  should  be  displaced  by  tonnage 
which  is. 

Shortage  of  Labor 

d.  The  United  States  Employment  Service  finds  that  there  is  an 
acute  shortage  in  the  labor  needed  for  the  war  program.  It  is  absolutely 
essential  that  labor  which  may  now  be  idle,  or  which  may  be  engaged 


Photo  from  Maritime  Manufacturing  Corporation,  St.  John,  N.  B. 

ROUGH  FORGINGS  FOR  9.2-INCH  SHELL 


Photo  by  Signal  Corps 

STEEL  BILLETS  AT  MUNITIONS  PLANT 


PRIORITY  53 

on  nonwar  or  less  essential  work,  should  be  employed  upon  work 
which  will  contribute  toward  winning  the  war. 

It  is  therefore  evident  that  the  building  and  construction  field  fur- 
nishes an  instance  calling  imperatively  for  the  exercise  by  the  War 
Industries  Board  of  the  duty,  with  which  the  President  charged  it,  of 
conserving  the  resources  and  facilities  of  the  country  for  war  purposes, 
of  determining  necessary  priorities  in  production  and  in  delivery,  of 
obtaining  access  to  materials  in  any  way  preempted,  and  of  anticipating 
prospective  war  needs. 

It  is  clear  that  there  is  not  enough  iron,  steel,  transportation  facili- 
ties, fuel,  and  labor  to  supply  the  direct  and  indirect  war  needs  of  the 
country,  and  the  nonwar  needs  also,  and  that  the  resources  and  facili- 
ties used  in  nonwar  and  less  essential  building  projects  can  only  be 
applied  thereto  by  taking  them  from  the  war  needs. 

Would  Postpone  End  of  War 

The  inevitable  result  of  this  would  be  failure  to  supply  the  war 
requirements  of  the  country  as  they  are  needed.  It  would  mean  that 
nonwar  and  less  essential  needs  would  be  satisfied  at  the  sacrifice  of 
war  needs,  with  the  consequent  postponement  of  the  day  when  the  war 
will  end  and  when  American  lives  will  be  freed  from  the  hazards  of 
battle. 

The  attached  orders  were  promulgated  by  the  War  Industries  Board 
as  a  necessary  means  of  avoiding  this  unhappy  result. 

These  orders  were  only  issued  after  the  nearly  six  months'  warning 
given  by  the  resolution  of  March  21,  1918,  which  is  quoted  at  length 
in  Circular  No.  21. 

Attention  is  also  called  to  the  fact  that  before  Circular  No.  21  was 
issued  numerous  conferences  were  held  between  the  Board  and  the 
manufacturers  of  the  principal  building  materials.  The  latter  appre- 
ciated fully  the  situation  as  briefly  outlined  above,  and  heartily  agreed 
to  cooperate  with  the  Board  in  carrying  into  effect  the  spirit  of  the 
resolution  of  March  21,  1918,  and,  to  that  end,  to  enter  into  the  pledge 
set  forth  in  Circular  No.  21. 

Manufacturers  in  Doubt 

The  manufacturers,  however,  felt  that,  not  having  the  country's  war 
program  before  them,  it  was  impossible  for  them  to  determine  what 
building  projects  were  essential  and  what  were  less  essential.  They 
felt  that  the  War  Industries  Board  should  determine  this  question  as 
definitely  as  possible,  and  should  pass  upon  doubtful  cases  for  them. 

Accordingly,  the  Board  did  determine  what  were  essential  projects, 


54  THE  GIANT  HAND 

defining  them  in  paragraphs  numbered  1  to  5,  inclusive,  of  Circu- 
lar No.  21,  and  projects  of  this  character  may  proceed  as  therein  ex- 
plained. Other  building  projects  are  not  prohibited,  but  may  likewise 
proceed  if  the  local  council  of  national  defense,  which  is  primarily  the 
body  best  fitted  to  judge,  finds  them  in  the  public  interest  or  essential; 
and,  if  this  finding  is  approved  by  the  War  Industries  Board,  building 
projects  which  do  not  measure  up  to  these  standards  must  be  deferred 
until  the  war  program  is  fulfilled.  If  they  are  not,  the  due  fulfillment 
of  the  war  program  will  be  impossible. 

The  orders  referred  to  are  very  much  in  the  interest  of  the  public, 
because  they  will  prevent  the  public,  including  the  trade,  from  planning 
or  undertaking  building  projects,  and  then,  after  plans  or  commit- 
ments have  been  made,  finding  that  the  war  program  makes  it  impos- 
sible to  secure  the  materials  necessary  to  complete  them. 

Moreover,  the  trade  itself  will  find  that  because  of  the  enormous 
housing  and  other  construction  work  which  the  Government  itself  is 
undertaking,  a  large  part  of  the  trade's  facilities  will  simply  be  trans- 
ferred to  new  lines  of  building  activity. 

Will  Further  Curtail  Nonwar  Work 

Finally  the  operation  of  the  Selective  Service  Acts  will,  much  more 
than  has  already  been  the  case,  directly  affect  the  amount  of  labor 
available  for  the  building  trade  and  for  other  industries.  Even  with 
increased  efficiency  and  female  labor,  the  natural  outcome  of  this 
condition  must  be  to  curtail  and  reduce  the  volume  of  any  given  busi- 
ness not  connected  with  the  war  program.  As  far  as  it  is  possible  to 
do  so,  the  less  essential  industries  are  being  converted  to  more  essential 
activities,  but  there  will  be  a  certain  percentage  of  these  industries 
which  can  not  be  so  converted.  Therefore,  the  volume  of  business  in 
the  less  essentials  will  be  reduced,  and  with  this  reduction  there  will 
come  a  corresponding  reduction  in  taxability. 

It  is  not  only  the  policy,  it  is  the  clear  and  simple  duty  of  the  War 
Industries  Board  to  see  that  the  war  program  of  the  country  is  met, 
and  this  program  must  be  met  now,  when  its  needs  are  upon  us.  This 
duty  must  be  fulfilled,  even  if  its  fulfillment  entails  industrial  loss  in 
this  country,  as  it  does  human  loss  abroad. 

I  have  the  honor  to  remain, 

BERNARD  M.  BARUCH, 

Chairman  War  Industries  Board. 

The  building-construction  order  gave  the  hunters  for  flaws 
in  the  War  Administration  the  opportunity  to  charge  that  the 


PRIORITY  55 

War  Industries  Board  was  godless  and  that  it  regarded  religion 
as  nonessential — an  indictment  based  on  the  circumstance  that 
the  order  did  not  exempt  churches  from  the  list  of  interdicted 
nonwar  construction.  Few  religious  leaders,  however,  took 
part  in  this  criticism,  for  they  recognized  that  true  religion  is 
not  a  matter  of  brick  and  stone  and  architecture,  but  of  faith 
and  good  works.  No  less  a  figure  than  the  Reverend  William 
A.  Sunday,  the  evangelist,  was  adversely  affected  by  the  order, 
which  forbade  him  to  build  the  well-known  "tabernacles"  in 
which  he  holds  his  meetings.  Naturally  Mr.  Sunday  wanted  to 
know  why  an  exception  could  not  be  made  for  him ;  and  Judge 
Parker  told  him,  in  much  the  same  language  which  Mr.  Baruch 
had  used  in  his  reply  to  the  Senate.  In  answer  to  his  explana- 
tion Mr.  Parker  received  the  following  telegram  from  Mr. 
Sunday : 

Winona  Lake,  Ind. 
1918,  Sept.  17,  P.M.  10:20. 
Edwin  B.  Parker, 

War  Industries  Priorities  Committee, 
Washington,  D.  C. 

Your  kind  letter  received.  I  thoroughly  understand  and  sympathize 
with  you  in  your  position.  I  gladly  comply  with  your  wishes  regarding 
building  of  tabernacles,  and  will  carefully  explain,  so  there  will  be  no 
misunderstanding  on  the  part  of  the  public  that  you  are  not  in 
sympathy. 

W.  A.  SUNDAY. 

Billy  Sunday  was  the  idol  of  a  large  personal  following  in 
the  United  States.  His  acquiescence  in  the  edict  of  the  Board 
was  widely  published,  and  it  was  of  genuine  assistance  to  the 
Board  and  to  the  priorities  commissioner. 

To  the  control  of  industrial  priorities  is  due  much  of  the 
credit  for  the  enormous  strides  which  shipbuilding  and  the 
fabrication  of  munitions  for  the  Army  and  Navy  were  able 
to  make  in  1918 — a  period,  too,  which  was  notable  not  so 
much  for  what  it  actually  produced  as  for  what  it  prepared 
to  produce  in  1919  and  1920.  To  determine  who  should  have 


56  THE  GIANT  HAND 

prior  access  to  the  resources  of  America  and  to  see  that  the 
favored  ones  actually  secured  the  access,  to  carry  out  such  a 
system  in  an  industrial  country  as  large  as  the  United  States, 
combating  prejudice  and  misunderstanding  on  one  side  and 
assaying  the  importunities  of  the  Government's  own  depart- 
ments on  the  other — that  was  a  great  work.  There  was  no  other 
function  of  the  War  Industries  Board  more  important. 


Photo  by  Signal  Corps 

HAMMERING  STEEL  FOR  GUN  SHIELDS 


Photo  from  Quartermaster  Department 


VIEW  IN  ARMY  TEXTILE  MILL 


CHAPTER  IV 
INDUSTRIAL  CONVERSION  AND  CONSERVATION 

OUR  commercial  and  economic  structure,  the  whole 
business  world,  is  like  a  tree.  From  a  small  beginning 
it  grew,  putting  out  branch  after  branch,  twig  after 
twig,  leaf  after  leaf,  until  it  became  an  intricate  whole.  There 
are  two  ways  of  looking  at  a  tree — from  the  sesthetic  point 
of  view,  and  from  the  practical.  The  artist  sees  in  a  tree  purely 
a  thing  of  beauty — the  sturdy  trunk  as  a  focal  point  for  the 
attention,  the  graceful  ramification  of  the  branches,  the 
tracery  of  the  twigs  against  a  winter's  twilight,  or  the  depths 
of  shading  in  the  summer  foliage.  The  lumberman  views  it  as 
a  trunk  only,  containing  so  many  board  feet  of  clear  timber; 
and  when  utility  triumphs  over  art,  the  branches  and  twigs 
are  lopped  off  for  the  cordwood  pile  and  the  brush  heap,  and 
the  trunk  alone  goes  to  the  sawmill. 

War,  the  apotheosis  of  all  things  practical  and  utilitarian, 
approached  our  business  tree  with  an  intensely  practical  eye. 
It  was  soon  evident  that  we  should  have  to  do  a  terrific  amount 
of  lopping  off  before  the  lumber  could  be  made  most  useful 
for  war  purposes. 

Apparently,  in  the  times  of  peace  we  had  not  made  one 
useless  or  unnecessary  thing;  yet  when  the  war  came  we  found 
out  that  we  were  making  more  useless  and  unnecessary  things, 
if  anything,  than  we  did  useful  ones — useless,  that  is,  to  the 
program  of  war.  Nor  did  it  take  long  to  find  out  this  truth. 
There  were  not  men  or  materials  or  factories  enough  to  con- 
tinue the  essentially  peace-time  activities  of  industry  and  at 
the  same  time  to  make  all  the  necessary  things  which  the 
Great  God  War  demanded. 

The  problem  of  trimming  the  industrial  tree  was  twofold — 


58  THE  GIANT  HAND 

first,  to  find  the  facilities  which  could  be  converted  to  the 
making  of  war  materials,  and  second,  to  find  the  curtailments 
in  enterprise  which  could  be  accomplished  without  altering 
the  peace-time  tree  so  materially  that  it  no  longer  resembled 
a  tree,  or  without  (and  here  was  danger)  killing  the  tree  alto- 
gether. This  double  problem  was  one  of  the  vital  issues  with 
which  the  War  Industries  Board  was  confronted.  It  tackled 
it  from  the  two  sides  and  by  means  of  two  machines,  called 
respectively  the  Resources  and  Conversion  Section  and  the 
Conservation  Division. 

The  thing  sounds  a  good  deal  easier  than  it  really  was.  It 
seems  so  simple  to  sit  in  an  office  and  say:  "Mr.  Manufacturer 
of  Pianos,  how  would  you  like  to  limit  your  production  of 
instruments  which,  no  matter  how  valuable  and  well  made 
they  may  be,  are  scarcely  suited  to  damaging  Germans  across 
a  strip  of  No  Man's  Land,  and  make,  let  us  say,  mounts  for 
big  guns?"  To  the  closet  theorist  it  seems  so  entirely  probable 
that  the  piano  manufacturer  will  immediately  throw  in  the 
scrap  heap  all  his  piano-making  machinery  and  substitute 
forthwith  the  necessary  tools  for  making  gun  mounts.  It  may 
also  seem  credible  that  the  chap  whose  life  has  been  spent  in 
attaining  skill  in  covering  wooden  hammers  with  felt  can  be 
metamorphosed  overnight  into  an  expert  riveter  or  a  lathe 
tender,  and  the  one  whose  ear  has  by  practice  been  attuned  to 
the  tonal  subtleties  of  stretched  metal  strings  can  learn  between 
dark  and  dawn  to  make  machine  threads  upon  gun  screws. 

But  the  problem  of  war  industrial  conversion  was  not  simple 
at  all.  A  factory  is  not  just  a  building  filled  with  machinery, 
although  that  is  the  common  idea.  It  is  an  organization  of 
trained  personnel.  When  the  great  Edison  works  at  Orange, 
New  Jersey,  burned  to  the  ground  a  few  years  ago,  the  crea- 
tion anew  of  the  plant  was  only  a  question  of  architects,  of 
cement,  brick,  and  structural  steel.  The  workmen  of  the  fac- 
tory were  not  damaged;  the  intelligence  which  fabricated  the 
Edison  products  was  untouched.  When  the  war  reached  into 
this  and  a  thousand  other  factories  and  plucked  therefrom 
some  of  the  best  of  the  workmen,  the  factories  were  seriously 


INDUSTRIAL  CONVERSION  59 

crippled — some  so  seriously  that  they  did  not  recover  for 
months  after  the  armistice. 

As  between  taking  workmen  away  from  a  factory  and  not 
replacing  them,  and  changing  the  whole  product  of  a  factory, 
there  is  little  to  choose,  as  far  as  damage  is  concerned,  unless 
the  new  thing  made  is  in  kind  of  materials  used  and  in  manu- 
facturing process  allied  to  the  thing  which  the  factory  has 
been  making.  No  change  in  method,  materials,  or  organiza- 
tion was  necessary  when  Nordyke  &  Marmon,  makers  of  auto- 
mobiles, began  to  manufacture  Liberty  engines.  When  Henry 
Ford  undertook  the  job  of  making  cylinders  for  gasoline 
engines  for  the  War  Department  he  built  a  new  plant;  but 
he  built  what  he  had  built  before  and  his  workmen  worked  at 
a  thing  they  understood.  To  ask  a  piano  factory  to  make  gun 
mounts  would  be  on  a  parity  with  asking  a  seamstress  to  dig 
post  holes.  But  the  piano  factory  could  make  the  frames  of 
airplane  wings,  even  as  the  seamstress  could  sew  on  gas  masks 
as  well  as  on  party  dresses.  The  piano  factory  had  fine  wood- 
working machinery  and  skilled  cabinetmakers.  The  organi- 
zation which  could  carry  a  piano  from  frame  to  finished  arti- 
cle could  also  function  in  the  production  of  airplane  wings. 
Finding  these  factories  which  could  change  their  jobs  with  a 
minimum  loss  of  skill  and  efficiency,  and  which  could  economi- 
cally continue  in  existence  as  a  part  of  the  war  machine — such 
was  the  problem  of  war  industrial  conversion. 

It  would  not  be  particularly  difficult,  for  instance,  to  alter 
a  factory  engaged  in  making  office  desks  into  one  which  pro- 
duces dining-room  tables.  It  is  not  impossible  to  conceive  of 
a  sewing-machine  factory  transformed  into  a  plant  for  pro- 
ducing lawn  mowers.  We  can  easily  understand  that  a  rolling 
mill  for  making  bridge  members  might  as  well  make  structural 
beams  for  railroad  cars,  or  vice  versa.  The  demands  of  war, 
however,  were  not  primarily  for  these  familiar  things  of 
peace,  but  for  engines  new  and  strange — for  things  we  had 
never  made  before ;  or,  if  we  had  made  them  at  all,  for  things 
which  had  been  produced  in  but  small  quantity  and  in  few 
places. 


60  THE  GIANT  HAND 

The  thousands  of  factories  of  a  peaceful  nation  are  engaged 
in  turning  out  the  myriad  articles  of  peace-time  demand.  On 
a  day,  that  nation  goes  to  war  and  faces  an  immediate,  an 
instant,  need  of  guns,  shell,  automotive  transport,  wire,  fire- 
works, bombs,  high  explosives,  time  fuses,  trench  mortars, 
gas  masks,  new  and  strange  chemicals  designed  to  poison  whole 
armies,  airplanes,  submarines,  new  forms  and  kinds  of  optical 
instruments,  and  a  hundred  thousand  other  things,  many  of 
which  it  has  never  made.  To  select  in  America  the  peace-time 
factories  which  could  be  converted  with  the  least  damage  and 
the  least  loss  of  time,  and  to  get  them  started  on  the  new 
program,  was  a  herculean  task. 

Why  not  be  done  with  it  and  build  and  equip  new  factories 
for  the  manufacture  of  the  new  things'?  That  might  have  been 
practicable,  had  there  been  only  one  new  thing  to  make;  and 
indeed  we  did  build  new  plants  to  make  some  of  the  more 
difficult  supplies.  But  to  make  all  the  new  things  in  new  fac- 
tories would  have  been  ruinously  wasteful  of  materials  and 
effort,  and  the  nation's  energies  would  have  been  spent  merely 
in  preparing  to  manufacture.  The  conservative  and  efficient, 
and  the  only  possible,  thing  to  do  was  to  take  the  facilities 
at  hand  and  convert  them  into  a  war  plant. 

It  was  highly  important  that  shortages  in  manufactured 
articles  be  eliminated,  as  well  as  shortages  in  raw  materials. 
So  complicated  is  modern  warfare  that  a  whole  great  project 
may  be  held  in  check  for  lack  of  some  one  manufactured 
thing.  The  Chemical  Warfare  Service  might  make  its  gas, 
manufacturers  might  produce  the  cylinders  to  contain  it,  the 
railroads  might  be  ready  to  haul  it,  and  the  soldiers  trained  to 
use  it;  and  yet  if  the  man  who  made  the  tool  which  ground 
the  valve  seat  of  the  valve  which  fitted  in  the  cylinder  was 
behindhand,  the  whole  chemical  warfare  work  would  be  held 
up.  Wireless  played  a  vital  part  in  the  communication  on  the 
battle  field.  Modern  wireless  depends  upon  the  audion  bulb. 
The  audion  bulb  depends  on  tungsten  wire;  and  the  making 
of  tungsten  wire  depends,  among  other  things,  on  a  small 
quantity  of  a  special  and  highly  divided  form  of  graphite.  A 


Photo  from  Recording  6?   Computing  Machine  Company 

ASSEMBLING  SHELL  FUSES  IN  FORMER  COMPUTING- 
MACHINE  FACTORY 


Photo  from   American   Multigraph   Sales    (. 


FORMER  PRINTING-MACHINERY  FACTORY  MAKING 
SHELL  FUSES 


INDUSTRIAL  CONVERSION  61 

failure  in  the  supply  of  graphite  might  mean  the  failure  of 
such  an  operation  as  that  at  St.  Mihiel.  The  net  weight  of  the 
hairsprings  used  in  making  time  fuses  for  our  big  shell  could 
have  been  only  a  few  ounces;  yet  without  these  few  ounces 
of  fine  steel  the  whole  work  of  shell  maker,  high-explosive 
manufacturer,  and  gun  producer  might  have  gone  for  noth- 
ing. We  had  never  made  our  own  optical  glass,  and  when  we 
entered  the  war  we  faced  a  real  problem  in  supplying  it  for 
our  telescopes,  our  range  finders,  our  photographic  lenses,  and 
our  sextants.  Germany  and  Austria  had  been  our  sources  of 
it;  now  we  were  fighting  them.  The  problem  was  solved,  and 
we  won  independence  of  Europe  in  the  war  supply  of  optical 
glass;  but  someone  had  to  develop  the  resources  which  did  it. 

We  had  to  train  new  men  to  do  new  things.  Training  a 
man  to  do  anything  in  the  first  place  is  a  question  of  picking 
the  right  man  to  train.  You  can  not  produce  a  gunmaker  out 
of  a  silk  salesman  as  easily  as  you  can  out  of  a  man  who  has 
spent  his  life  making  tools  in  a  machine  shop.  It  is  far  easier 
to  take  men  who  have  worked  on  phonographs,  electric  motors, 
or  automobiles,  and  train  them  to  make  machine  guns,  than 
it  is  to  train  brakemen,  bank  clerks,  or  candy  makers  to  the 
use  of  the  metal-working  lathe  and  the  gauge.  Here  again  the 
War  Industries  Board  had  its  problem  to  face:  to  find  not 
only  the  building  and  the  organization  which  could  be  altered 
to  war  uses,  but  the  factory  and  the  organization  which  had 
personnel  capable  of  being  diverted  to  the  new  work  in  the 
minimum  of  time  and  with  the  least  loss  of  efficiency. 

Finally,  the  War  Industries  Board  would  have  functioned 
poorly  and  ill  served  the  President  and  the  country  to  which 
it  owed  allegiance,  if  its  labors  had  resulted  in  filling  the  war 
demand  at  the  cost  of  commercial  demoralization,  stagnation, 
and  ruin  after  the  war.  Some  new  plants  had  to  be  built;  but 
they  were  kept  as  few  as  possible,  because  the  reconversion 
of  a  plant  equipped  strictly  for  the  production  of  some  specific 
war  commodity  is  a  hard,  if  not  impossible,  task.  Such  plants 
become  largely  excess  baggage  when  the  war  ends.  The  fewer 
the  new  facilities  provided  and  the  more  numerous  the  exist- 


62  THE  GIANT  HAND 

ing  facilities  converted  and  used,  the  less  difficult  the  process 
of  industrial  reconstruction  after  the  war.  This  point  the 
Board  had  to  bear  constantly  in  mind;  and  here,  indeed,  was 
where  the  trained  business  vision  and  the  broad  knowledge  of 
industry  possessed  by  the  executives  of  the  Board  stood  the 
United  States  in  good  stead. 

Before  industry  could  be  managed  as  war  industry,  an 
integral  whole,  it  had  to  be  explored  and  catalogued;  and  in 
that  process  business  in  the  United  States  suffered  from  a 
plague  of  questionnaires,  like  unto  that  of  the  locusts  in  Egypt. 
And  many  and  loud  were  the  protests.  In  trying  to  find  out 
who  made  what,  and  where  he  made  it  and  how,  and  how 
many  men  he  had,  and  what  he  could  make,  and  how  fast  he 
could  make  it,  paper  after  paper  was  sent  to  manufacturer 
after  manufacturer,  with  endless  blanks  to  be  filled  in,  end- 
less questions  to  answer.  The  various  bureaus  did  the  best  they 
could;  but,  with  all  of  them  addressing  questionnaires  to 
industry,  there  was  much  duplication  and  much  unnecessary 
annoyance  to  business.  Yet  these  same  questionnaires,  if  a 
bother,  brought  results  and  made  possible  the  conversion  of 
industry  and  the  conservation  of  materials  and  effort  without 
the  accompaniment  of  a  train  of  evil  effects  after  the  war. 

The  Resources  and  Conversion  Section  accomplished  some 
factory  transformations  which  would  seem  almost  impossible, 
especially  when  one  considers  the  brevity  of  the  time  at  its 
disposal.  But  never  let  it  be  forgotten  that  American  industry 
stood  solidly  behind  the  War  Industries  Board.  The  problem 
was  not  to  persuade  the  manufacturer  to  change  his  plant  over- 
night, but  to  keep  him  from  changing  it  to  the  wrong  thing. 
Silk  manufacturers  would  have  cheerfully  gone  to  making 
horseshoes,  or  producers  of  iron  pipe  to  making  optical  instru- 
ments, had  they  been  permitted.  The  problem  was  to  find  the 
right  man,  the  right  factory,  and  the  right  organization  to  do 
any  certain  job.  Having  found  them,  it  was  no  task  at  all  to 
set  them  to  work. 

"What  can  I  do  to  help*?"  asked  the  carpet  manufacturer.  "I 


.     INDUSTRIAL  CONVERSION  63 

know  you  don't  want  carpets  for  the  trenches,  but  I  have  a 
factory.  ..." 

"Blankets,"  was  the  answer.  "Blankets  and  duck — we  need 
a  lot,  and  we  need  it  to  come  fast." 

"My  business  is  making  household  refrigerators.  I  don't 
suppose  you  equip  dugouts  with  refrigerators,  but  I  have 
twelve  hundred  men  and  a  big  plant  filled  with  woodworking 
machinery;  and  I  am  at  your  service.  .  .  ." 

"Field  hospital  tables — we  have  to  have  a  great  many.  The 
Navy  needs  filing  cases,  special  pattern." 

"Can  you  use  a  blacksmith?  We  make  horseshoes  for  the 
trade." 

"Most  of  our  horses  are  shod  with  rubber,  and  it  takes 
four  tires  for  one  of  them.  But  we  need  trench  picks,  not  by 
ones  and  twos,  but  by  the  hundred  thousand.  A  trench  pick 
is  made  of  iron,  and  it  is  forged.  .  .  ." 

"Hand  us  over  your  order,  and  we'll  go  to  it."  And  they 
did. 

"My  business  is  making  toys.  They  say  every  factory  in 
the  country  can  do  some  war  work,  and  that  those  not  engaged 
in  manufacture  of  articles  essential  to  war  activities  or  civilian 
existence  have  got  to  be  discontinued  or  curtailed.  I  have  250 
men,  a  fine  modern  building  and  I  want  to  help.  .  .  ." 

"How  about  packing  boxes'?  We  have  ten  thousand  differ- 
ent kinds  of  things  to  ship  three  thousand  miles,  and  many  of 
them  must  be  packed  carefully.  Our  present  packing-case 
industry  isn't  big  enough  by  half.  .  .  ."  And  the  toy  men 
turned  to  and  made  packing  cases  for  everything  from  small 
telescopes  to  automobiles. 

Plants  which  ordinarily  made  vacuum  cleaners  ceased  to 
promote  cleanliness  and  made  small  parts  for  Liberty  engines. 
Wliy  not"?  A  vacuum-cleaner  factory  is  a  place  devoted  to 
the  manufacture  of  finely  machined  small  parts  for  small 
machines.  A  Liberty  engine  is  a  large  mechanism,  but  it  has  a 
multitude  of  small  parts.  Not  one  factory  made  Liberty 
engines,  but  many.  The  parts  were  made  in  many  factories 
and  merely  assembled  in  the  few  main  plants. 


64  THE  GIANT  HAND 

What  would  you  say  a  fishing-rod  manufacturer  could  do 
to  help  to  win  the  war*?  The  Signal  Corps  needed  jointed 
staffs  for  all  sorts  of  purposes,  from  small  flagstaffs  to  portable 
wireless  masts:  the  workmen,  the  machinery,  the  stock  on 
hand,  even  the  varnish  used  for  fishing  rods,  fitted  the  new 
products  as  if  produced  originally  for  them.  Someone  had 
to  think  that  out  and  bring  together  the  need  and  the  supply. 

There  were  a  number  of  shirt  factories  in  the  country  which, 
because  of  their  small  size  and  their  remoteness  from  cloth 
centers,  or  for  other  reasons,  could  not  be  employed  on  gov- 
ernment clothing  contracts  as  efficiently  as  upon  other  work. 
The  Conversion  Section  had  an  answer  for  them,  too,  and  set 
some  of  them  to  making  mosquito  nets.  If  a  stove  man  came 
in  fired  with  a  desire  to  supply  kitchen  ranges  to  officers'  quar- 
ters at  the  front,  he  was  set  to  work  making  hand  grenades 
and  trench  bombs.  A  stove  factory  is  nine-tenths  foundry  for 
small,  well-finished  castings,  and  hand  grenades  are  castings 
of  that  sort. 

The  fellow  whose  job  in  life  was  making  corsets  didn't 
propose  to  be  left  out.  He  besieged  Washington  with  his  offers 
to  help.  And  some  shortsighted  officers  rather  laughed  at  the 
idea  that  one  whose  business  it  was  to  make  laced  casings  for 
the  female  form  could  add  anything  to  the  progress  of  the  war 
industry  of  the  land.  Not  so  Resources  and  Conversion.  That 
section  had  imagination  and  knowledge,  and  soon  found  that 
a  corset  factory  could  make  medical  corps  belts  and  fencing 
masks  as  well  as  corsets.  Gear  plants  made  gun  sights;  pipe- 
organ  factories  did  woodwork  and  metal  work  for  Army  and 
Navy;  rubber  and  canvas  artificers  produced  gas  masks; 
ladies'  waist  factories  made  signal  flags.  The  conversions  were 
startling  in  the  smaller  organizations,  and  they  were  notable 
and  momentous  in  the  larger;  as  when  radiator  manufacturers 
became  makers  of  big  guns,  automobile-body  builders  made 
airplanes,  and  automobile  factories  made  tanks  and  navy 
destroyers. 

While  the  factories  were  being  changed,  the  problems  of 
industrial  conservation  were  being  solved.  Even  to  outline 


Photo  from  Crown  Cork  6?  Seal  Company 

BOTTLE-CAP  FACTORY  MAKING  MACHINE-GUN  TRIPODS 


Photo  from  Michigan  Stove  Company 

STOVE  WORKS  CASTING  TRENCH-MORTAR  SHELL 


INDUSTRIAL  CONVERSION  65 

the  full  story  of  conservation,  pages  would  be  necessary,  where 
paragraphs  are  now  to  be  spared.  Conservation  had  so  many 
ramifications  and  touched  so  many  lives  in  so  many  ways  that 
a  volume  could  be  devoted  to  it. 

The  general  public  felt  the  effects  of  industrial  conservation 
in  the  limitations  upon  the  use  of  coal,  food,  and  other  com- 
mon commodities;  but  these  savings  were  matched  by  other 
economies,  unadvertised,  but  actually  accomplished  in  special 
ways  and  by  special  means.  Industrial  conservation  was  emi- 
nently war  industries  board  work.  The  War  Industries  Board, 
itself  formed  out  of  bodies  originally  created  within  the  Coun- 
cil of  National  Defense,  received  from  its  parent  the  Coun- 
cil's Commercial  Economy  Board,  which  it  made  into  the 
Conservation  Division.  The  Conservation  Division,  under  the 
direction  and  chairmanship  of  Mr.  A.  W.  Shaw,  the  Chicago 
publisher,  proceeded  to  do  certain  things  which  industry  at 
first  called  disorganizing  and  later  acclaimed  as  life-saving. 

Conservation  of  our  industrial  assets  was  necessary  in  order 
to  make  the  national  supply  of  materials,  labor,  and  trans- 
portation go  around  among  all  the  war  needs  and  essential 
civilian  needs.  The  available  materials,  labor,  and  transporta- 
tion were  none  too  much  even  to  supply  normal  demand  in 
flush  times.  The  war  machine,  infinitely  greedier  and  more 
wasteful  than  the  normal  organization  of  the  country,  could 
not  be  expected  to  thrive  unless  the  normal  organization  were 
starved  down.  The  theory  under  which  the  conservation  sched- 
ules were  drawn  was  not  complicated.  It  amounted  to  a  reduc- 
tion in  styles,  varieties,  sizes,  color,  and  finishes  wherever  pos- 
sible, to  the  end  that  stocks  of  raw  materials  might  be  reduced, 
labor  released,  and  transportation  saved.  Certain  unessential 
products,  such  as  materials  for  personal  adornment,  as  dis- 
tinguished from  those  for  use,  were  prohibited  altogether.  The 
transportation  burden  was  lightened  both  by  the  elimination 
of  packages  of  small  size  and  by  an  increase  in  the  number  of 
units  to  the  standard  large  packages.  The  Conservation  Divi- 
sion established  sharply  limited  standards  of  size,  weight, 
length,  width,  and  thickness. 


66  THE  GIANT  HAND 

It  is  probable  that  not  even  Mr.  Shaw,  before  he  got  well 
into  his  work,  had  any  idea  of  the  lengths  to  which  conserva- 
tion could  go  in  the  elimination  of  sizes,  kinds,  and  styles  in 
almost  everything  manufactured.  Certainly  the  public  was 
never  aware  of  the  extent  to  which  duplication  of  common 
varieties  of  manufactured  goods  had  been  carried.  As  an 
instance,  consider  the  front  and  rear  gears  of  farm  wagons. 
For  a  hundred  years  wagon  manufacturers  had  been  adding  to 
their  assortments,  inventing  and  devising  new  styles,  kinds, 
and  varieties.  One  kind  is  popular  in  one  locality;  in  another 
the  farmer  will  have  none  of  it,  but  demands  something  en- 
tirely different.  It's  a  big  country,  and  it  has  a  thousand  local 
conditions,  prejudices,  likes,  and  dislikes;  and  the  manufac- 
turer, during  times  of  peace,  finds  it  profitable  to  cater  to  local 
taste  and  opinion.  Along  comes  a  Conservation  Division  of  a 
War  Industries  Board  and  says :  "Stop  the  useless  duplication. 
The  railroads  can't  carry  so  much.  Eliminate — reduce — cur- 
tail !"  Result,  to  give  a  single  instance,  one  wagon  manufac- 
turer reduces  his  varieties  of  front  and  rear  gears  from  1,736 
to  16. 

Carry  this  out  through  the  industry,  and  imagine  the  saving 
in  raw  materials,  in  money  tied  up  in  stock,  in  catalogue 
space,  in  salesmen's  time,  in  shipping  and  packing.  Yet  the 
farmer  was  amply  taken  care  of:  he  found  that  the  gear 
which  he  wouldn't  have,  because  he  had  never  used  it,  was 
really  just  as  good  as  the  one  he  had  been  using.  Oklahoma 
used  the  kind  familiar  in  Maine,  and  Montana  made  shift 
with  what  had  been  supplied  to  Georgia,  and  no  one  was  a 
whit  the  worse  off. 

Let  no  one  imagine  that  Mr.  Shaw  and  his  Conservation 
Division  went  into  industries  unfamiliar  to  them,  took  the 
catalogues,  and  ruthlessly  lopped  off  items,  forbidding  this, 
that,  and  the  other.  The  real  wonder  of  war  industrial  con- 
servation was  not  so  much  what  was  done  as  how  it  was  done — 
as  the  teamwork  which  brought  it  about.  Industries  were  asked, 
through  trade  journals  and  organizations,  to  appoint  what 
were  called  "war-service  committees."  Each  war-service  com- 


INDUSTRIAL  CONVERSION  67 

mittee  was  representative  of  the  best  thought  of  the  given 
industry  as  a  whole.  The  committees  met  individually  with 
the  Conservation  Division,  the  officers  of  which  explained 
the  need  for  conservation  in  the  various  products.  If  any  com- 
mittee were  not  persuaded  by  the  mere  statement  of  the  fact, 
it  was  speedily  shown  to  it  in  concrete  figures  that  there  were 
just  so  many  cars  in  the  country  and  just  so  many  train  miles 
possible  in  a  given  time;  it  was  shown  in  tons  what  the  boys 
in  France  had  to  have — what  had  to  be  moved — and  it 
needed  no  further  demonstration  to  show  that  shipping  space 
had  to  be  saved.  When  this  argument  was  repeated  in  terms 
of  labor,  of  materials,  and  of  machinery,  the  war-service  com- 
mittee stopped  asking  any  question  other  than  "What  can 
we  do?' 

"This  is  what  you  can  do,"  answered  Mr.  Shaw.  "You  can 
go  carefully  over  your  practice  and  tell  me  what  you  can 
eliminate  without  absolutely  crippling  your  industry  and 
working  actual  hardship  to  the  public.  Disregard  what  people 
want  merely  because  they  want  it.  Tell  me  what  they  have  to 
have  and  what  they  can  get  along  without.  We  must  take  for 
strictly  war  purposes  so  much  of  the  materials  you  ordinarily 
use.  You  can  have  so  much  only.  Now  get  me  up  a  curtailment 
schedule  which  you  think  will  meet  the  situation." 

The  war-service  committee  went  into  executive  session  and 
did  as  it  was  told.  The  result,  with  some  necessary  modifica- 
tions, became  the  conservation  schedule  of  that  industry.  It 
went  to  every  manufacturer  in  the  trade  and  to  all  whole- 
salers and  retailers  connected  with  the  distribution  of  that 
particular  product.  Thus  the  industry  itself  virtually  pre- 
scribed its  own  curtailments,  and  the  spirit  of  cooperation 
within  the  industry  made  the  conservation  schedules  effective 
without  any  display  of  force  by  the  War  Industries  Board. 
The  occasional  manufacturer  who  objected  was  taken  care  of 
by  his  own  industry  and  by  its  opinion  and  fiat. 

An  example  or  two  may  serve  to  show  how  vitally  impor- 
tant was  the  work  in  conservation.  It  was  hardly  less  than 
revolutionary  to  force  the  women  members  of  the  buying 


68  THE  GIANT  HAND 

public  to  contribute  willy-nilly  to  the  winning  of  the  war  by 
denying  them  their  age-old  privilege  of  dressing  as  they 
pleased.  Yet,  by  limiting  the  women's  garment  industry  to 
the  production  of  models  which  were  economical  in  yardage, 
the  Conservation  Division  effected  a  saving  of  cloth  which 
totaled  nearly  twenty-five  per  cent  of  what  would  have  been 
consumed  by  the  unrestricted  range  of  models. 

Mr.  Shaw  had  not  only  a  broad  vision  for  the  execution  of 
large  plans,  but  an  ability  to  see  the  small  details  of  a  cam- 
paign as  well.  It  might  not  appear  at  a  casual  glance  that 
ordinary  thread  offered  much  of  an  opportunity  for  the  appli- 
cation of  measures  in  conservation;  but  Mr.  Shaw  was  no 
casual  observer.  "Thread,"  he  argued,  "is  wrapped  on  spools; 
and  spools  are  made  of  wood  and  are  round;  and  wood  is 
valuable;  and,  moreover,  round  objects  pack  uneconomically. 
The  fewer  the  spools,  the  greater  the  saving.  How  much  thread 
is  on  a  spool,  anyway*?" 

Someone  told  him  the  answer.  The  old  length  was  200 
yards.  With  only  their  own  business  in  mind,  thread  makers 
had  reduced  the  commercial  spool-length  to  150  yards  and 
were  about  to  reduce  it  to  100  yards,  in  order  to  keep  the  unit 
selling  price  (which  it  was  not  good  business  to  disturb)  the 
same,  and  still  get  more  for  their  thread.  Mr.  Shaw  fixed  the 
standard  length  of  thread  to  be  wound  on  a  spool  at  200  yards, 
and  to  his  satisfaction  promptly  figured  out  an  annual  ship- 
ping-space saving  equivalent  to  more  than  600  freight  car- 
loads. Six  hundred  cars  can  carry  supplies  enough  to  main- 
tain a  regiment  and  a  half  in  the  field  for  one  year! 

Our  domestic  resources  supplied  everything  needed  for  war, 
with  a  few  important  exceptions,  one  of  which  was  rubber. 
Therefore  it  was  essential  to  conserve  rubber;  for  war  is  an 
insatiable  consumer  of  it;  and  the  war  in  1918  demanded  of 
us  that  we  use  all  the  shipping  we  could  muster,  without  wast- 
ing any  of  it  to  bring  in  rubber  for  unnecessary  rubber  articles. 
Odd  sizes  of  tires  for  old  automobiles  of  obsolete  models  were 
regularly  made  and  carried  in  stock  by  almost  all  the  tire 
companies,  with  the  result  that  much  rubber  and  money  were 


Photo  from  Kissel  Motor  Car  Company 

ORDNANCE  TRUCKS  READY  FOR  SHIPMENT 


Photo  from  Durham  Hosiery  Mills 

KNITTING  SOCKS  FOR  AMERICAN  SOLDIERS 


INDUSTRIAL  CONVERSION  69 

tied  up  in  stock.  The  rubber  industries  and  Mr.  Shaw's  divi- 
sion worked  out  schedules  which  reduced  287  styles  and  sizes 
of  automobile  tires  down  to  9,  the  reduction  to  be  effected 
gradually  through  two  years.  Conservation  in  the  rubber-tire 
industry  alone  released  more  than  enough  rubber  for  all  war 
purposes,  especially  since  it  was  supported  by  conservation 
measures  in  other  branches  of  rubber  manufacture.  As  in- 
stances, 272  styles  and  sizes  of  rubber  raincoats  were  dis- 
continued altogether,  and  5,500  kinds  of  rubber  footwear 
fell  under  the  conservation  axe. 

The  need  of  saving  steel  was  equaled  only  by  the  impor- 
tance of  releasing  from  unnecessary  manufacturing  enter- 
prises men  skilled  in  the  working  of  steel.  Steel  so  permeates 
our  entire  life  that  almost  every  one  of  the  conservation 
schedules  touched  it  somewhere.  Special  instances  of  the  war 
conservation  of  steel  were  to  be  found  in  the  agricultural  im- 
plement trade,  in  which  the  sizes  and  styles  of  steel  plows 
became  75  in  number  instead  of  312,  planters  and  drills  de- 
clined to  29  from  784,  disc  harrows  to  38  from  588,  while  one 
model  of  a  buggy  axle  substituted  for  a  former  loo.  These 
were  but  typical  of  what  went  on  all  through  the  implement 
trade.  The  hardware  trade  was  able  to  cut  in  half  its  multi- 
plicity of  styles  and  designs. 

The  conservation  schedules  invaded  all  of  America's  manu- 
facturing life.  As  fast  as  the  Division  could  function,  as  rap- 
idly as  trade  bodies  could  be  gathered  together,  with  whatever 
speed  the  emergency  could  engender,  the  reductions  were  made 
and  carried  out.  It  was  a  surgical  procedure — a  major  opera- 
tion, with  patriotism  the  only  anaesthetic.  A  complete  list  of 
industrial  products  to  which  the  principles  of  conservation 
were  applied  would  cover  many  pages.  Here  are  the  names 
of  just  a  few  items:  Road-making  machinery,  chains,  metal 
ware,  bicycles,  motor  cycles,  children's  vehicles,  clocks,  pens, 
pencils,  talking  machines,  motion-picture  projectors,  burial 
goods,  furniture,  beds,  vacuum  cleaners,  washing  machines, 
household  wringers,  refrigerators,  mackinaws,  stoves  and 
ranges,  furnaces,  oil  stoves,  enameled  goods,  galvanized  ware, 


70  THE  GIANT  HAND 

cameras,  hand  stamps  and  marking  devices,  adding  machines, 
autographic  registers,  sales  check  books,  typewriters,  cash 
registers,  tabulating  machines,  time  records,  fire-prevention 
and  fire-fighting  apparatus,  trace  chains,  corsets,  pocket  cut- 
lery, hosiery  and  underwear,  hats,  felt  shoes,  gloves  and  mit- 
tens, harness  and  saddlery,  trunks  and  traveling  goods,  over- 
alls, book  cloths,  typewriter  ribbons,  upholstery  batts, 
bedding,  woodenware,  nails,  bolts,  rivets,  bottles,  chinaware, 
crockery,  bed  davenports,  and  paints  and  varnishes. 

It  was  important  work,  this  conservation  in  war  industry. 
It  was  done  quickly,  because  it  was  aided  by  the  loyal  coop- 
eration of  the  manufacturers  most  affected.  It  was  done 
bravely,  in  that  it  took  courage  and  determination  to  carry 
through  these  unprecedented  interferences  with  business.  It 
was  dramatic  as  a  spectacle  of  civilians,  outsiders,  laying  pro- 
fane hands  upon  industry  and  to  all  intents  and  purposes  tell- 
ing it  what  it  could  and  could  not  do.  And  it  was  work 
done  well :  undoubtedly  it  maimed  industry  but  it  did  not  kill 
it — the  indispensable  amount  of  surgery  was  accomplished 
with  such  clean,  swift  strokes  that  the  wounds  healed  after 
the  war  and  left  no  scars. 


CHAPTER  V 
PRICE  FIXING 

WHEN  two  masters  of  the  game  of  chess  play  a 
match,  the  result  is  usually  decided  by  the  fact 
that  at  some  stage  of  the  proceedings  one  of  the 
players  is  able  to  see  farther  into  the  future  than  the  other.  In 
any  game  as  exact  and  scientific  as  chess,  a  move  produces  not 
only  its  immediate  result,  but  a  series  of  future  results. 

"If  I  move  that  knight,  I  uncover  the  bishop.  But  if  the 
bishop  be  attacked,  there  is  the  pawn  to  move  up  in  support. 
However,  if  I  move  the  pawn  I  may  subject  myself  to  a  check 
by  the  hostile  queen.  In  that  event  I  have  a  rook  which  could 
be  interposed;  but  moving  the  rook  will  weaken  the  flank  of 
my  otherwise  protected  pawns.  If  they  be  left  unguarded,  will 
not  my  opponent  direct  an  attack  on  them?  On  the  other 
hand,  if  I  leave  the  knight  where  it  is,  it  will  probably  get 
into  severe  difficulties;  and  the  positional  advantage  I  should 
gain  could  not  win,  unless  I  could  force  the  game  to  a  con- 
clusion before  my  opponent  could  bring  into  play  his  reserve 
pawns.  .  .  ."  And  so  on,  sometimes  for  hours  of  deliberation. 

No  part  of  the  war  game  more  nearly  resembled  chess,  in 
the  far-reaching  results  of  any  move  made  in  it,  than  that 
department  which  dealt  with  price  fixing. 

Government  price  fixing — the  very  words  are  hateful  to 
American  business  as  we  know  it.  Our  whole  business  structure 
is  predicated  upon  individualism,  upon  the  right  of  each  to  do 
as  he  chooses  within  the  limits  of  statutory  law,  unhindered 
by  outer  authority  meddling  in  affairs.  America  believes  in 
competition  as  being  the  life  of  trade,  and  has  given  concrete 
manifestations  of  this  belief  in  various  regulatory  laws  and  in 
laws  forbidding  too  much  concentration  of  interest  into  one 


72  THE  GIANT  HAND 

set  of  hands — all  of  this  for  the  protection  of  the  sacred  indi- 
vidual. And  one  of  the  individual's  inalienable  rights  is  his 
right  to  fix  his  own  prices  for  what  he  sells.  In  this  exercise 
he  contends  only  against  the  economic  law  of  supply  and 
demand. 

When  the  war  came  many  of  the  fundamental  concepts  of 
American  business  liberty  went  by  the  board.  The  Government 
discarded  its  own  protective  laws  and  abridged  individual 
liberties  as  it  saw  fit,  for  the  sake  of  national  unified  efficiency. 
And  it  went  further — it  set  its  artificial  mandate  in  the  path 
of  the  natural  law  of  supply  and  demand.  And  then  it  was  dis- 
covered that,  while  the  Government's  will  was  an  immovable 
body,  the  law  of  supply  and  demand  was  by  no  means  an 
irresistible  force.  In  that  collision  the  law  of  supply  and  de- 
mand went  to  smash.  The  Government  successfully  kept  prices 
down,  although  supply  was  inadequate  and  demand  virtually 
unlimited. 

No  act  of  the  War  Government  was  more  necessary,  yet 
more  daring,  than  its  manipulation  of  prices.  It  is  always  dan- 
gerous to  fool  with  a  natural  law,  as  the  Australian  farmers 
discovered  some  years  after  they  had  imported  the  ancestral 
pairs  of  rabbits.  The  trouble  with  interfering  with  natural  law 
is  that  you  can  never  foresee  the  entire  train  of  consequences. 
Fix  the  price  of  wheat,  and  you  may  gain  the  immediate  end 
of  an  increased  crop  of  it,  only  to  find  that  the  acreage  of  sugar 
beets  has  been  sacrificed,  giving  you  another  problem  to  handle 
as  puzzling  as  that  of  the  shortage  in  flour.  Increase  the  beet 
acreage  by  a  fixed  price,  and  you  may  find  the  corn  crop  dimin- 
ished, with  a  consequent  sacrifice  of  hogs.  And  so  it  goes 
throughout  the  industrial  organization  of  the  country.  The 
Government  went  into  price  fixing  with  its  eyes  open,  well 
aware  that  the  price-fixing  organizations  must  be  flexible,  able 
to  change  rules  and  policies  on  the  instant,  in  order  to  deal 
with  the  complications  as  they  arose. 

And  yet  no  war  act  was  more  necessary.  A  short  peanut  crop 
makes  high  peanut  prices.  Translate  the  peanut  shortage  into 
a  shortage  of  steel,  copper,  wool,  transportation,  labor,  fuel, 


Photo  from  Pain  s   U.  S.   Government  Signal  Factory 

WATERPROOFING  TRENCH  SIGNAL  ROCKETS 


Photo  by  Signal  Corps 


AN  ARMY  UNIFORM  FACTORY 


Photo  from  Harnsburg  Pipe  &  Pipe  Bending   Company 


TEN  THOUSAND  FINISHED  CYLINDERS  FOR 
MANY  WAR  USES 


Photo  from    Canadian   A  l/is-Chalmers,   Ltd. 


MANUFACTURING  SHELL  FOR  THE  75*8 


PRICE  FIXING  73 

guns,  shoes,  clothing,  barbed  wire — in  fact,  a  shortage  in 
everything;  introduce  into  the  situation  a  hydra-headed  mon- 
ster called  war,  its  insatiable  mouths  consuming  and  destroy- 
ing wealth  at  four  or  five  times  the  normal  rate  of  civilian 
consumption;  and  add  the  complication  that  everything  de- 
manded is  needed  not  next  year  or  next  week,  but  to-day;  and 
straightway  you  hear  from  industry  a  refrain  of  this  sort: 
"Demand  is  great  and  supplies  short.  We  must  charge  more 
for  this  order  than  the  last,  and  the  next  will  be  more  yet." 
Had  such  a  system  continued  without  control,  prices  would 
have  reached  fantastic  heights,  depreciating  the  currency  and 
bequeathing  to  the  future  a  legacy  of  debt  that  might  have 
been  intolerable,  even  to  so  rich  and  populous  a  country  as 
America. 

Nor  could  industry  itself  keep  down  its  own  prices  by  vol- 
untary act.  Patriotism  had  nothing  to  do  with  it.  The  Govern- 
ment is  an  impersonality,  huge,  remote.  No  matter  how  much 
each  producer  individually  might  wish  to  contribute  to  the 
success  of  America  in  the  war,  he  was  helpless  before  the 
onward  sweep  of  the  economic  law.  His  cost  prices  rose,  and 
he  charged  more — he  charged  what  the  trade  charged;  and 
sentiment  cut  no  figure  in  the  situation.  The  Allied  buying  in 
this  country  had  skyrocketed  many  prices,  but  our  own  partici- 
pation in  the  war  seemed  likely  to  make  the  former  price 
records  seem  tame  and  low  indeed. 

Hence  the  creation  of  the  Price  Fixing  Committee  of  the 
War  Industries  Board.  It  was,  and  was  not,  a  part  of  the 
Board.  At  no  time  during  their  existence  was  either  Board  or 
Committee  quite  certain  in  just  what  relation  one  stood  to  the 
other.  Not  wholly  independent  of  the  War  Industries  Board, 
the  Price  Fixing  Committee  could  hardly  be  called  subsidiary 
to  it,  because  the  President,  and  not  the  Board,  named  the 
members  of  the  Committee,  which  thus  considered  itself  re- 
sponsible to  the  President,  and  not  to  the  Board.  It  was  the 
President,  and  not  the  Board,  who  approved  the  prices  fixed 
and  made  them  official.  The  chairman  of  the  War  Industries 
Board,  who  had  had  a  hand  in  the  creation  of  the  Price  Fixing 


74  THE  GIANT  HAND 

Committee,  believed  that  this  was  a  wiser  course  than  allow- 
ing the  War  Industries  Board  to  fix  prices.  The  authority  of 
the  War  Industries  Board  was  vested  in  its  chairman  alone: 
the  authority  of  the  Price  Fixing  Committee  rested  in  the 
Committee  as  a  body.  The  Price  Fixing  Committee  came  into 
being  largely  because  Mr.  Baruch  saw  the  need  for  it  and 
fought  for  the  creation  of  an  agency  to  fill  the  need.  Price 
announcements  went  forth  as  from  the  "Price  Fixing  Commit- 
tee of  the  War  Industries  Board";  and  Mr.  Brookings,  its 
chairman,  functioned  in  close  communion  with  the  Board.  The 
arrangement  was  anomalous;  yet  it  worked  out. 

Perhaps  no  single  factor  contributed  more  to  the  success- 
ful labors  of  the  Price  Fixing  Committee  than  the  interroga- 
tive mind  which  its  chairman  possessed.  Mr.  Robert  S.  Brook- 
ings,  capitalist  and  philanthropist  of  St.  Louis,  was  a  human 
question  mark.  His  friends  averred  that  he  could  ask  more 
questions  in  a  given  space  of  time,  and  think  up  more  angles 
of  a  subject  about  which  to  frame  inquiries,  than  any  other 
living  man.  When  it  came  to  the  absorption  of  facts,  Mr. 
Brookings  was  a  human  sponge.  And  it  was  just  this  quality 
which  made  him  so  valuable  to  an  organization  which  had  to 
meddle  with  a  hundred  and  one  industries  and  make  deter- 
minations which  gravely  affected  them.  The  investigations  of 
the  accountants,  statisticians,  and  other  employees  of  the  Price 
Fixing  Committee  Mr.  Brookings  supplemented  with  his  own 
rapid-fire  of  questions  and  with  personal  research  which  gave 
him  great  insight  into  the  affairs  under  discussion. 

Of  course,  they  damned  him  up  hill  and  down  dale,  did  the 
executives  of  big  business — for  one  reason,  because  they  found 
him  constitutionally  unable  to  let  someone  else  make  up  his 
mind  for  him.  Yet  the  greatest  of  the  testimonials  to  the  work 
he  did  came  from  these  same  business  executives,  who,  after 
the  arguments  and  discussion  and  question-answering  were  all 
over,  turned  to  and  carried  out  the  mandates  of  the  Price 
Fixing  Committee  faithfully  and  even  with  enthusiasm. 

At  one  time  before  the  war  Brookings  was  interested  in  a 
plan  to  erect  in  his  native  city  one  of  the  finest  hospitals  of 


PRICE  FIXING  75 

its  kind  in  the  world.  His  architect  and  his  expert  on  the 
arrangement  of  hospitals  came  to  a  clash  on  a  question  of 
building  design.  There  was  no  composing  the  difficulty:  each 
man  was  entirely  sure  he  was  right. 

"We'll  adjourn  the  matter  for  three  months,"  decided  Mr. 
Brookings.  "We'll  let  it  alone  for  a  while." 

Whereupon  Mr.  Brookings  himself  took  up  the  question  for 
study.  He  got  books  on  architecture  and  read  them.  He  trav- 
eled about  and  visited  the  hospitals  of  many  cities.  He  asked 
questions  of  builders  and  architects,  of  doctors,  nurses,  and 
hospital  superintendents.  At  the  end  of  three  months  he  knew 
more  about  hospitals,  from  the  standpoint  of  the  question  at 
issue,  than  did  either  his  architect  or  his  hospital  expert.  He 
settled  the  difficulty  by  deciding  that  both  were  wrong,  and 
then  went  ahead  with  what  turned  out  to  be  a  model  building 
of  its  kind. 

It  was  this  same  thirst  for  information,  this  same  determina- 
tion to  know  what  he  was  doing  before  he  did  it,  that  made 
Mr.  Brookings  go  into  minute  details  in  his  work  on  the  Price 
Fixing  Committee.  He  loaded  his  office  with  exhibits  and 
samples  and  examples — it  became  a  veritable  museum  of  war 
supplies.  His  detractors  called  him  fussy;  but  the  same  fussi- 
ness  which  was  satisfied  with  nothing  less  than  all  the  infor- 
mation there  was  to  be  had,  put  behind  the  mandates  of  the 
Price  Fixing  Committee  an  authority  which  they  might  not 
otherwise  have  achieved. 

Of  all  the  affairs  of  the  War  Industries  Board,  nothing 
transcended  price  fixing  in  importance.  The  Board  itself  laid 
down  the  policy  upon  which  the  Price  Fixing  Committee  acted. 
Two  courses  were  possible — two  extreme  courses — with  middle 
ground  between.  First,  low  prices  as  a  policy.  Low  prices  kept 
down  war  profits  and  conserved  governmental  expenditures. 
On  the  other  hand  low  prices  were  discouraging  to  war  indus- 
try, and  the  Government  wished  to  avoid  such  discouragement. 
At  the  other  extreme  were  prices  fixed  high,  high  enough  to 
permit  large  and  even  swollen  profits.  Such  prices  stimulated 
production,  which  was  precisely  what  the  War  Industries 


76  THE  GIANT  HAND 

Board  wished  to  do.  And  if  the  Government  paid  much  for 
its  supplies,  it  also  recovered  much  of  what  it  paid  by  means 
of  the  income  tax  and  the  excess  profits  tax. 

The  War  Industries  Board  did  not  hesitate:  to  it  there 
seemed  to  be  only  one  answer  to  the  question.  Industry  had  to 
be  considered  first — we  could  not  win  the  war  by  following 
any  pinch-penny  policy.  Prices  should  be  fixed  primarily  to 
secure  maximum  production  at  the  mills,  and  that  could  come 
about  only  by  allowing  reasonable  profits.  If  such  prices 
allowed  the  more  efficient  producers  to  make  large  profits, 
their  profits  would  be  largely  taxed  away  from  them  anyhow. 
To  fix  low  prices  might  save  money;  but  it  would  probably 
cut  down  production,  and  it  might  lose  the  war. 

There  was  a  fundamental  difference  between  the  price-fixing 
activities  of  the  Price  Fixing  Committee  and  those  of  other 
great  control  agencies,  such  as  the  Food  Administration  and 
Fuel  Administration.  The  latter  derived  their  authority  from 
congressional  enactments,  and  they  took  the  initiative  in  fixing 
prices.  The  Price  Fixing  Committee  had  no  such  authority 
from  Congress,  save  as  it  obtained  it  through  the  broad  war 
powers  granted  to  the  President.  Moreover,  the  Price  Fixing 
Committee  fixed  prices  only  when  the  agencies  of  the  Govern- 
ment requested  it,  or,  in  rarer  instances,  when  the  Government 
was  using  so  much  of  any  commodity  that  it  became  obviously 
necessary  to  control  the  price. 

Digging  into  the  affairs  of  the  War  Industries  Board,  one 
discovers  a  continual  cropping  out  of  the  curious  fact  that 
democratic  America  submitted  uncomplainingly  to  an  auto- 
cratic control  of  about  everything  save  its  right  to  breathe. 
But  this  autocratic  control,  under  the  decentralizing  policy  of 
Mr.  Baruch,  reposed  in  various  hands.  Baruch  had  a  high 
example  of  the  policy  of  decentralization  in  the  person  of  the 
President,  who  had  delegated  many  of  his  vast  powers  to 
administrators — Hoover  in  the  Food  Administration,  Garfield 
in  the  Fuel  Administration,  McAdoo  in  the  Railroad  Adminis- 
tration, and  Baruch  himself  in  control  of  war  industry.  Mr. 
Baruch  decentralized  his  power  throughout  his  Board,  and 


Photo  by   Kajiwara 


ROBERT  S.  BROOKINGS 


PRICE  FIXING  77 

handed  over  his  authority  to  men  whom  he  first  chose  with 
care,  then  instructed  with  minute  detail,  and  finally  turned 
loose  with  a  figurative  slap  on  the  shoulder  and  a  "Now  go  at 
it !"  If  one  asked  him,  "What  authority  have  I*?"  he  answered : 
"All  that  is  necessary.  The  President  has  it  from  Congress;  he 
gave  it  to  me;  I  give  it  to  you.  I  back  you  in  everything  you 
do.  Don't  bother  me  with  details — do  the  job!"  And  they 
did  it. 

Mr.  Brookings,  too,  possessed  such  authority.  The  President 
had  wisely  made  it  plain  to  the  country  that  he  personally  was 
interested  in,  and  directly  concerned  with,  the  labors  of  the 
Price  Fixing  Committee;  and  that  when  an  authority  never 
before  seen  in  Government  stepped  into  an  industry  and  said, 
"You  will  sell  your  product  for  so  and  so  much,  neither  more 
nor  less,"  the  President  had  known  of  this  mandate  and  had 
approved  it  beforehand.  The  President  felt  confident  in  giving 
his  approval,  because  all  governmental  agencies  interested  in 
a  fixed  price  had  had  a  hand  in  fixing  it — an  important  fact. 
Of  course,  President  Wilson  did  not  review  or  pass  upon  every 
activity  of  the  Price  Fixing  Committee.  He  did,  however,  per- 
sonally receive  all  their  reports;  and  he  advised  with  them  in 
difficult  decisions.  Probably  as  much  because  of  this  as  for 
any  other  reason,  the  Price  Fixing  Committee  met  little  if  any 
opposition,  and  had  to  show  its  teeth  but  seldom. 

Yet  it  possessed  teeth.  It  could  smile  and  still  reveal  the 
grim  threat  to  commandeer,  the  mere  possibility  of  drastic 
action  being  amply  sufficient  to  bring  any  recalcitrant  into  line. 
And  besides,  behind  the  Committee  was  always  the  chairman 
of  the  War  Industries  Board,  possessing  unplumbed  powers 
and  ready  to  use  them  fearlessly.  On  one  or  two  occasions, 
when  manufacturers  were  obdurate,  he  did  use  them;  but 
generally  the  smile  without  the  threat  was  sufficient.  The 
Committee  placed  far  more  reliance  upon  a  policy  of  coopera- 
tion than  upon  compulsion. 

Note  that,  although  the  Price  Fixing  Committee  fixed  prices, 
it  did  not  execute  its  decisions.  The  administration  of  fixed 
prices  was  in  the  hands  of  the  fifty-seven  commodity  sections 


78  THE  GIANT  HAND 

of  the  War  Industries  Board.  Later  on  we  shall  tell  something 
about  the  more  important  of  the  great  war  commodity  sections. 

To  show  how  prices  were  fixed,  let  us  take  steel  as  an 
instance.  In  1917  steel  plates  were  selling  for  sixteen  cents  a 
pound.  The  United  States  as  a  government  needed  every  pound 
of  steel  the  country  could  make.  Literally,  it  could  spare  none 
for  the  general  public;  and  it  is  history  that  no  rails,  no 
bridges,  no  buildings,  nor  anything  else  that  took  steel,  were 
made  for  civilian  consumption  during  the  war  except  by  per- 
mission of  the  Government — and  also  except  products  which 
could  be  made  from  steel  of  grades  not  needed  by  the  vital 
ships  and  guns  and  shell.  Therefore,  since  the  Government 
expected  to  consume  practically  the  entire  national  output  of 
steel,  for  it  to  pay  a  great  profit  to  the  steel  makers  was  a 
great  hurt  to  the  United  States. 

The  Federal  Trade  Commission  made  an  investigation  and 
declared  that  three  and  a  quarter  cents  a  pound  was  enough 
for  steel,  this  price  including  a  fair  profit.  Three  and  a  quarter 
cents — or  sixteen  cents'?  Which"? 

The  Price  Fixing  Committee  did  not  adopt  the  lower  price 
summarily  and  say:  "Thus  shall  you  do!"  It  consulted  the 
trade.  It  called  the  steel  men  to  Washington  and  laid  the 
matter  before  them.  "We  know  you  can  sell  for  three  and  a 
quarter  cents.  We  want  all  the  steel  you  have.  We  need  all  the 
money  we  have  for  other  things.  Three  and  a  quarter  cents 
will  let  you  live  and  function.  It  will  not  make  you  a  fortune ; 
but  if  we  don't  win  this  war,  your  fortunes  will  be  worthless, 
anyhow.  We  haven't  any  intention  of  quoting  any  law  to 
you — we  are  not  commanding,  but  offering  you  an  opportunity. 
The  Government  asks  you,  gentlemen,  to  give  us  your  steel  at 
this  one  price.  Will  you  do  it*?"  Of  course,  they  did;  and  not 
with  the  feeling  that  they  were  victims  of  coercion. 

This,  generally,  was  the  way  price  fixing  proceeded.  Dr. 
F.  W.  Taussig,  the  economist,  who  was  a  member  of  the  Price 
Fixing  Committee,  said  of  its  labors :  "The  prices  fixed  were  in 
all  cases  reached  by  agreement  with  representatives  of  the 
several  industries.  In  strictness,  they  were  agreed  prices  rather 


PRICE  FIXING  79 

than  fixed  prices.  The  agreements  were  usually  reached  in 
cordial  cooperation  with  the  producers  concerned,  and  thus 
were  in  reality  voluntary.  There  were  cases,  however,  in  which 
they  were  agreements  only  in  name.  The  representatives  of 
some  industries,  though  they  accepted  them,  did  so  virtually 
under  duress.  In  these  cases  the  Committee  to  all  intents  and 
purposes  decreed  prices  and  was  enabled  to  impose  them  under 
the  form  of  agreement,  by  a  more  or  less  veiled  threat  of  com- 
mandeering and  also  by  the  certainty  that  public  opinion 
would  condemn  those  who  failed  to  accede." 

When  Uncle  Sam  sets  up  commissions  and  other  bodies  to 
administer  parts  of  his  business,  they  are  often  unwieldy  with 
personnel  and  slow  to  move  through  the  sheer  inertia  of  their 
great  size.  But  this  particular  agency  of  control,  the  Price 
Fixing  Committee,  which  handled  the  very  roots  of  American 
industry,  was  a  small  and  compact  body.  Its  role  was  that  of 
a  watchdog  for  the  Government.  It  labored  only  when  asked 
to  labor  by  other  parts  of  the  governmental  machinery;  and 
first  and  last  it  was  an  engine  designed  to  protect  the  purchas- 
ing power  of  the  United  States  from  being  exploited  by  the 
law  of  supply  and  demand.  The  Price  Fixing  Committee 
included  representatives  of  the  Army  and  Navy,  who  kept  it 
informed  of  their  contemplated  purchases  and  their  price  prob- 
lems. Its  membership  included  also  representatives  of  the  War 
Industries  Board,  who  were  personally  familiar  with  the  avail- 
able raw  materials  in  various  industries  and  with  the  supply 
of  labor.  It  included  a  representative  of  the  Fuel  Administra- 
tion, which  body  could  control  the  supply  of  fuel  for  manu- 
facturers; and  also  representatives  of  the  Tariff  Commission 
and  Federal  Trade  Commission  sat  with  it,  to  supply  technical 
data  showing  how  contemplated  prices  might  affect  produc- 
tion. Toward  the  end  of  the  war  a  representative  of  the  agri- 
cultural interests  was  added  to  the  Committee.  The  Price 
Fixing  Committee  was  thus  more  truly  representative  of  Gov- 
ernment and  industry  than  any  of  the  other  civilian  control 
agencies,  because  of  the  wide  diversity  of  activities  repre- 


80  THE  GIANT  HAND 

sented  in  it.  The  purchasing  public  and  the  retail  and  whole- 
sale trade  never  had  direct  representation  in  the  Committee. 

Besides  the  determination  of  policy  there  were  a  hundred 
and  one  details  to  consider  in  relation  to  the  fixing  of  prices : 
activities  which  differentiated  the  labors  of  the  price  fixers 
from  those  of  any  other  controlling  body  in  the  War  Govern- 
ment, even  though  some  of  the  others  had  much  to  do  with 
prices.  It  was  an  early  and  a  wise  decision  that  American  indus- 
try controlled  should  be  a  one-price  institution — that  the  Gov- 
ernment would  not  fix  one  price  for  itself,  another  for  the 
Allies,  and  still  a  third  for  the  general  public.  True,  the  pur- 
chasing public  could  not  buy  at  the  fixed  price  merely  because 
the  price  was  fixed.  Telling  John  Smith,  who  made  safety 
razors,  that  fine  steel  could  be  bought  for  three  and  a  quarter 
cents  a  pound,  didn't  get  John  any  steel.  At  this  point  the  con- 
trol of  priority  stepped  in  and  said:  "Mr.  Smith,  we  realize 
that  it  is  necessary  for  the  general  public  to  be  shaved,  because 
America  is  a  dapper  nation  and  doesn't  want  to  look  like  a 
tramp.  But  as  between  being  shaved  with  old  blades  re- 
sharpened  and  with  new  ones  in  comfort,  there  is  a  little  mat- 
ter of  a  war  going  on,  and  it  must  be  the  deciding  factor.  First 
access  to  the  steel  goes  to  the  Army  and  Navy.  Then  come  the 
railroads  and  the  shipbuilders,  and  after  them  a  lot  of  other 
caterers  to  strictly  war  needs;  and  by-and-by  you  come  in. 
However,  if  you  are  ever  allowed  to  have  any  steel  for  the 
purpose  of  making  a  luxury,  you  can  have  it  at  the  same  price 
we  pay  for  it."  All  of  which  was  hard  on  the  razor  manufac- 
turer and  the  faces  of  the  to-be-shaved,  but  it  was  good  sense. 

It  would  have  been  folly  not  to  allow  the  purchases  of  the 
Allies  to  be  made  at  the  same  price  we  paid.  We  were  lending 
most  if  not  all  of  the  money  with  which  the  Allies  paid  their 
bills  here.  Not  to  have  given  them  every  advantage  we  pos- 
sessed in  our  own  markets  would  simply  have  meant  lending 
them  more  money,  raising  that  money  with  more  bonds  and 
taxes,  and  going  through  all  the  complication  of  getting  the 
swollen  profits  back  again  through  the  machinery  of  income 
and  excess  profits  taxes. 


Photo  from   Whitaker-Glessner   Company 

FORCINGS  FOR   1 55-MILLIMETER   SHELL  SPACED 
OUT  FOR  COOLING 


Photo  from  Osgood-Bradley   Car  Company 

MAKING  155-MILLIMETER  HOWITZER  CARRIAGES 


Photo  from  Bethlehem  Steel  Company 

RIFLING  12-INCH  AND  H-INCH  GUNS 


Photo  from  Maritime  Manufacturing   Corporation,  St.  John,  N.  B. 

AMERICAN  ARMY  SHELL  MADE  IN  CANADA 


PRICE  FIXING  81 

Prices,  when  fixed,  were  maximum  prices.  If  anything  was 
sold  for  less  than  the  maximum  price,  that  was  an  affair  be- 
tween buyer  and  seller,  and  sometimes  a  result  of  individual 
desire  to  keep  prices  down  and  thus  help  win  the  war.  More 
than  one  manufacturer  of  a  fixed-price  commodity  said,  "I 
can't  take  all  that  money";  and  an  impersonal  and  therefore 
ingrate  Government  accepted  the  amendment  and  took  the 
goods  at  the  lower  price.  The  rule,  however,  was  that  the 
maximum  price  was  accepted  without  question  by  buying 
Government  and  selling  individual. 

The  Committee  arrived  at  the  maximum  price  to  be  fixed 
through  investigation,  conference,  and  careful  consideration 
of  the  needs  of  the  moment.  To  say  that  the  Committee  in- 
dulged itself  in  an  opportunist  policy  might  be  unjust,  but  it 
certainly  did  temper  the  wind  to  the  shorn  lamb,  and  it 
changed  its  opinions  and  ideas  as  rapidly  as  the  situation 
changed.  And  situations  were  always  changing.  Mr.  Brook- 
ings  was  far  too  alert  and  vigorous-minded  to  get  himself  into 
a  rut;  and  if  the  procedure  which  fixed  prices  for  one  thing 
was  not  applicable  to  another,  or  if  the  principles  which  under- 
lay one  decision  did  not  apply  well  to  the  next,  he  formulated 
a  new  set  of  principles  and  proceeded  on  a  new  course,  with 
a  placid  disregard  of  his  own  precedents.  This  had  to  be,  if 
price  fixing  was  to  succeed.  A  rigid,  ossified  system  might  have 
been  disastrous. 

The  underlying  theory  was  to  fix  a  price  which  would  secure 
a  maximum  output  of  supplies  for  the  war  machine.  To  that 
level  prices  were  kept  down  in  order  to  save  money  and  pre- 
vent extortion.  American  industry,  however,  is  made  up  of  all 
sorts  of  producers  with  all  sorts  of  plants,  and  of  all  sorts  of 
organizations  of  all  varieties  of  efficiency.  Consequently,  any 
fixed  price  was  bound  to  work  some  injustice  somewhere.  The 
high-cost  producer  was  likely  to  suffer,  and  he  might  even  be 
forced  out  of  business  altogether.  The  low-cost  producer,  on 
the  other  hand,  the  efficient  producer  whose  costs  were  under 
the  average  in  his  industry,  was  likely  to  make  so  much  money 
that  he  would  think  it  a  shame  to  take  it.  The  in-between  man, 


82  THE  GIANT  HAND 

the  average  in  efficiency,  would  make  merely  a  legitimate 
profit.  This  was  a  condition  which  had  to  be  faced,  and  it  was 
faced.  The  Government  had  to  be  considerate  of  the  less  effi- 
cient in  order  to  keep  all  capacity  in  operation.  And  since 
American  industry  is  full  of  efficient  concerns,  the  Govern- 
ment's fixed  prices  developed  roaring  business  in  almost  all 
industries.  The  war  millionaires  resulting  from  this  policy 
gave  up  through  excess  profits  taxes  much  of  what  they  took  in. 

Having  fixed  a  price  for  a  commodity,  the  Price  Fixing 
Committee's  labors  pertaining  to  that  commodity  ended.  Here 
was  one  of  the  great  differences  between  it  and  other  price- 
controlling  members  of  the  Government.  When  the  Fuel  Ad- 
ministration fixed  a  price  for  coal,  it  also  administered  the 
application  of  that  price — bossed  the  job,  saw  to  it  that  the 
industry  did  as  it  was  told.  The  Railroad  Administration 
would  have  been  unable  to  function  if  it  had  not  possessed 
the  power  to  administer  its  own  prices  for  transportation.  The 
Food  Administration  would  have  been  ineffective  if  it  had 
merely  declared  a  price  and  then  left  it  to  voluntary  act  or 
federal  police  power  to  enforce  its  ukase. 

The  Price  Fixing  Committee  did  not  need  to  be  an  adminis- 
trative agency.  The  War  Industries  Board,  with  which  it  was 
affiliated,  possessed  the  necessary  administrators  of  fixed  prices 
in  its  commodity  sections.  Each  of  these  sections  dealt  with 
some  specific  thing  or  group  of  things,  and  each  was  made  up 
of  men  who  thoroughly  understood  their  specialties.  For  the 
Committee  to  have  administered  its  fixed  prices  would  have 
been  duplicating  work  of  the  commodity  sections.  It  was  Mr. 
Baruch's  idea  to  have  as  little  duplication  of  effort  in  the  War 
Industries  Board  as  possible.  Baruch,  a  business  man,  seeing 
a  Government  run  with  a  hundred  duplications  of  effort  of  all 
kinds,  naturally  reacted  from  so  wasteful  a  plan  in  his  own 
organization.  And  he  knew,  too,  as  did  Mr.  Brookings,  the 
extraordinary  value  of  minutes  in  the  great  campaign  America 
was  making  to  turn  itself  from  a  peaceful  nation  of  business, 
industry,  and  agriculture  into  a  hundred  million  units  thinking, 
breathing,  working,  and  striving  only  for  war. 


PRICE  FIXING  83 

What  we  were  to  do  had  to  be  done  speedily.  The  Govern- 
ment was  not  advertising  the  desperateness  of  the  situation  in 
early  1918,  but  the  extremity  was  patent  to  all  who  read.  The 
Allies  were  merely  holding  until  we  could  get  in  and  win.  The 
recital  of  our  preparations  for  1919  and  1920  is  convincing 
evidence  that  the  hope  of  the  world  was  in  us.  Every  day 
counted.  Every  day  increased  the  destruction  and  prolonged 
the  danger.  Speed  was  the  first  consideration  in  all  our  gov- 
ernmental activities.  The  Price  Fixing  Committee,  like  the 
life  guard  who  plunges  in  after  a  drowning  man,  had  to  work 
fast,  or  else  it  might  as  well  never  have  worked  at  all.  Hence 
its  prices  were  turned  over  to  those  expert  and  efficient  agen- 
cies, the  commodity  sections,  for  their  administration. 

But  why  all  this  elaborate  machinery1?  Why,  if  the  need  was 
so  sore,  did  not  the  United  States  seize  everything  it  had  to 
have,  commandeer  all  the  mines,  oil  wells,  plants  and  corpora- 
tions, fix  low  prices  and  low  wages,  and  compel  us  all  to  do 
what  was  necessary  to  win  the  war1?  Price  fixing  and  the  con- 
trol of  industry  constituted  the  alternative  to  just  that.  To 
have  seized,  czared  it  over  industry,  applied  government 
ownership  and  operation  everywhere,  would  indeed  have  pro- 
duced the  results;  but  along  with  such  a  course  would  have 
gone  the  destruction  of  those  institutions  and  principles  of 
government  which  America  most  jealously  guards.  The  Gov- 
ernment held  no  commission  from  the  people  to  destroy  the 
institutions  of  America,  even  temporarily,  or  even  for  so  neces- 
sary a  thing  as  victory  in  the  war;  and  moreover  it  is  doubtful, 
if  the  Government  had  engaged  in  a  policy  of  seizure,  whether 
the  prewar  conditions  could  ever  have  been  restored.  Price 
fixing  and  the  control  of  industry  accomplished  the  same  end, 
but  left  the  life  of  the  nation  to  function  normally  when  peace 
came.  The  industries  which  give  America  its  character  are  still 
alive  and  going;  yet  the  demands  of  the  war  were  met,  and 
the  Government  was  saved  from  the  embarrassments  resulting 
from  the  operation  of  a  runaway  law  of  supply  and  demand. 


CHAPTER  VI 
ALLIED  PURCHASES,  CLEARANCES,  AND  LABOR 

SHORTLY  after  the  fire  broke  out  in  Europe,  we  dis- 
covered that  a  conflagration  in  a  neighbor's  house  might 
not  be  an  unprofitable  affair  for  us,  especially  when,  in 
the  endeavor  to  put  out  the  fire,  every  one  concerned  was 
busily  engaged  in  feeding  the  flames.  As  there  was  not  half 
enough  material  for  good  firewood  in  all  Europe,  all  Europe 
naturally  turned  to  the  great  supply  house  which  is  the  United 
States  and  commenced  buying,  buying,  buying. 

Theoretically,  during  our  period  of  neutrality  we  sold  to  the 
Central  Powers  and  to  the  British-French-Italian  combination 
equally  and  without  prejudice:  practically,  we  sold  little  to 
Germany  and  her  allies,  because  of  the  difficulty,  not  to  say 
the  impossibility,  of  delivering  what  we  sold,  or  even  of  put- 
ting it  where  Germany  could  come  and  get  it.  If  the  submarine 
made  Allied  transport  precarious,  it  by  no  means  cleared  the 
seas  of  Allied  shipping;  whereas  the  Allied  navies,  and  the 
British  Navy  in  particular,  soon  expunged  German  surface 
ships  from  the  face  of  the  salt  waters.  Germany  did,  indeed, 
try  the  experiment  of  sending  a  submarine  freighter  to  Amer- 
ica, one  such  trip  being  made  successfully;  and  the  Deutsch- 
land  returned  safely  to  Germany  with  a  valuable  cargo  of 
nickel,  rubber,  and  other  essentials.  The  probabilities  are  that 
Germany  tried  this  experiment  for  political  rather  than  for 
commercial  reasons.  At  any  rate,  the  second  trip  of  the 
Deutschland  ended  in  disaster. 

Thus,  even  before  we  entered  the  war,  practically  all  our 
war  business  was  with  powers  with  which  we  were  eventually 
to  become  associated  as  co-belligerents.  At  the  outset  the  sev- 
eral Allies,  like  our  own  war  bureaus  when  we  entered  the 


Photo  from  Bethlehem  Steel  Company 

FOURTEEN-INCH  GUN  LOADED  FOR  SHIPMENT 


Photo  from  Bethlehem  Steel  Company 

MANUFACTURING  3-3-INCH  GUNS 


ALLIED  PURCHASES  85 

struggle  later  on,  bid  against  each  other  for  the  American 
supplies;  and  our  shell  makers,  powder  makers,  automobile 
makers,  and  railroad-equipment  makers,  not  to  mention  gun 
manufacturers  and  clothing  and  provision  houses,  began  to 
enjoy  unexampled  prosperity.  The  "war  baby,"  as  the  sud- 
denly prosperous  munitions  corporation  was  called,  jumped 
in  value  faster  than  the  stock  ticker  could  print  the  quotations 
of  the  prices  paid  for  its  securities.  Europe  was  then  rich  in 
money,  but  mighty  poor  in  time  and  war  materials.  Price  was 
not  an  object:  speed  was.  Many  a  man  with  a  few  thousand 
dollars  went  into  the  stock  market  in  the  morning  and  brought 
out  a  competence  at  night.  The  runaway  stock  market  was 
but  a  reflection  of  runaway  conditions  in  industry.  It  was  a 
situation  too  uncontrolled  to  endure;  and  the  purchasing 
powers  speedily  saw  that,  by  such  competition  among  them- 
selves, nothing  was  served  except  the  bank  accounts  of  a  few 
Americans. 

Then  we  came  into  the  war  and  were  no  longer  a  commer- 
cial neighbor  industriously  feathering  our  own  nest  from  the 
needs  of  those  fighting  just  beyond  our  front  yard.  We  were 
one  of  the  combatants,  a  partner;  and  we  now  needed  for  our- 
selves everything  that  we  had  been  making  for  the  Allies.  We 
might  then  have  said  to  England,  France,  and  Italy:  "Here, 
you  can't  buy  those  shell  and  that  powder  and  this  trainload 
of  rubber  tires  which  you  have  contracted  for.  If  we  are  going 
to  come  over  and  fight,  we  need  it  ourselves."  That  might  have 
been  good  politics,  if  it  had  enabled  the  Government  to  make 
a  strong  showing  with  the  production  of  supplies  for  the  Army 
at  the  outset;  but  it  would  have  been  poor  strategy.  We  had 
agreed  commercially,  if  not  governmentally  (our  Govern- 
ment, remember,  was  strictly  neutral  up  to  the  date  of  declar- 
ing war),  to  help  the  Allies.  To  have  withdrawn  that  help 
because  of  our  own  needs  would  simply  have  armed  untrained 
Americans  by  withholding  arms  from  trained  English,  French, 
Italian,  and  Belgian  soldiers.  We  had  to  supply  ourselves  and 
at  the  same  time  keep  on  supplying  Europe — there  was  no 
other  sane  course  to  follow. 


86  THE  GIANT  HAND 

There  were  hot-heads  who  demanded  an  immediate  em- 
bargo upon  the  outgo  of  everything  that  we  needed  for  war. 
The  disinterestedness  of  such  advice  was  questionable.  The 
United  States  is  the  most  self-sufficient  industrially  of  all 
nations;  but  there  are  several  important  commodities  that  we 
do  not  grow  or  mine  or  otherwise  produce.  And  some  of  the 
most  important  materials  of  modern  warfare,  such  as  battle 
airplanes  and  nose-fuse  shell  and  certain  kinds  of  artillery,  we 
did  not  even  know  how  to  make.  We  faced  a  period  of  indus- 
trial schooling  before  we  could  begin  to  produce  them  at  all. 
Yet  these  materials  our  Army  had  to  have.  Consequently,  even 
if  the  unwise  policy  of  cutting  off  the  Allies  to  supply  our- 
selves had  been  seriously  contemplated,  the  principle  of 
reciprocity — of  you  scratch  my  back,  and  I'll  scratch  yours — 
would  have  prevented  the  adoption  of  it. 

It  was  soon  seen  that  ( 1 )  the  influx  of  buying  orders  from 
abroad  must  not  be  discouraged  because  we  had  entered  the 
war,  that  (2)  we  could  not  afford  to  become  competitors  of  the 
Allies  and  allow  price  considerations  to  be  the  determining 
factor  in  the  question  of  whether  they  bought  the  supplies  or 
we  bought  them,  and  that  (3)  we  had  to  reach  some  agree- 
ment as  to  what  materials  we  could  do  without  in  order  that 
they  might  be  supplied,  and  also  as  to  what  we  did  not  mean 
to  make  for  ourselves  at  first  because  the  Allies  could  them- 
selves supply  us. 

It  is  doubtful  if  anyone  abroad  realized  what  America 
could  do  in  the  war.  Certainly  we  ourselves  did  not  know  until 
we  tried.  The  early  conferences  between  the  highly  accredited 
representatives  of  France  and  England,  which  countries  at 
once  sent  us  their  best  men  to  offer  advice  and  to  correlate 
our  war  activities  with  theirs,  gave  our  officials  their  first 
breath-taking  glimpse  of  what  a  fully  developed  war  indus- 
trial program  in  America  might  be.  We  had  no  such  program 
outlined  then — the  Administration  waited  until  we  were 
actually  at  war  before  laying  its  plans  for  a  war  program. 
Even  these  early  conferences  developed  no  balanced  and 
thought-out  program,  but  they  did  lay  the  foundation  on 


ALLIED  PURCHASES  87 

which  the  eventual  American  program  rested.  For  one  thing 
they  brought  a  mutual  understanding  as  to  what  the  Allies 
should  buy  here  and  what  we  should  buy  abroad.  Thereupon 
the  Allies  ceased  to  be  competitors  of  ours  in  the  domestic 
markets.  No  longer  did  they  even  decide  what  and  where  they 
should  buy;  rather  they  became  partners  and  sharers  with  us 
in  the  main  enterprise  of  turning  American  resources  into  sup- 
plies of  war.  Prices  were  no  longer  an  important  factor  in 
determining  who  secured  the  supplies,  because  we  adopted  at 
once  the  policy  of  charging  the  Allies  no  more  and  no  less  than 
we  charged  ourselves  for  the  same  commodities. 

To  take  care  of  the  needs  of  the  Allies  under  this  arrange- 
ment and  to  determine  the  relative  importance  of  their  de- 
mands, there  had  to  be  a  central  governmental  agency  in 
Washington.  This  agency  was  known  as  the  Purchasing  Com- 
mission for  the  Allies.  It  began  its  work  on  August  27,  1917, 
and  it  then  consisted  of  Messrs.  Baruch,  Lovett,  and  Brook- 
ings.  The  work  of  this  Commission  was  essentially  similar  to 
the  work  which  the  War  Industries  Board  later  undertook  to 
perform  for  all  of  the  Government's  consuming  agencies;  and 
consequently  the  President,  in  his  letter  chartering  the  War 
Industries  Board,  included  among  its  functions  the  supervi- 
sion of  purchases  for  the  Allies.  From  March  4,  1918,  the 
work  of  the  Commission  came  under  the  authority  of  the 
chairman  of  the  Board;  and  Mr.  Alexander  Legge,  the  vice 
chairman  of  the  War  Industries  Board,  was  made  "business 
manager"  for  the  Commission,  a  position  which  he  held  for 
only  a  short  interval,  until  the  press  of  other  duties  compelled 
him  to  give  it  up.  Mr.  James  A.  Carr  took  his  place. 

The  name  of  the  Purchasing  Commission  was  not  exactly 
descriptive  of  the  body,  because  the  Purchasing  Commission 
made  no  actual  purchases.  Indeed,  it  should  be  emphasized 
here  that  no  part  of  the  War  Industries  Board,  at  any  period 
of  its  history,  ever  entered  into  contracts  or  ever  spent  money, 
in  the  sense  that  it  became  a  buyer  to  whom  delivery  was  made 
and  from  whom  payment  was  expected.  The  War  Industries 
Board  was  a  controlling  and  all-powerful  directing  body, 


88  THE  GIANT  HAND 

which  planned  and  decided  and  was  obeyed,  but  which  no 
more  made  contracts,  no  more  accepted  deliveries  or  made 
payments  for  war  supplies,  than  did  President  Wilson  him- 
self, from  whose  authority  the  Board  sprang.  In  like  manner 
the  Purchasing  Commission  for  the  Allies  neither  prepared  nor 
signed  contracts,  nor  did  it  supervise  their  execution  or  de- 
termine technical  details  or  inspect  materials  or  products. 
These  things  were  the  business  of  the  buyers,  the  agents  of  the 
Allies.  The  business  of  the  Commission  was  to  see  that  the 
Allies  bought  what  they  had  to  have  and  not  more,  that  they 
received  the  same  treatment  as  to  price  and  delivery  that  we 
did,  and  that  the  various  belligerents  did  not  buy  outside  the 
authority  of  the  Commission. 

It  is  not  to  be  supposed  that  in  creating  the  Purchasing 
Commission  we  were  in  any  way  doing  a  favor  to  the  Allies, 
or  that  the  function  which  the  Commission  performed  was  not 
a  vitally  necessary  part  of  our  own  war  machinery.  It  was 
highly  important  that  we  know  what  the  Allies  wanted  to 
buy  in  order  to  adjust  our  own  demands.  Once  we  knew  the 
total  demand  upon  industry  and  had  estimated  the  total 
facilities  of  supply,  then,  when  the  Allies  approached  us  with 
some  project  in  conflict  with  ours,  we  could  allocate  the  sup- 
ply— we  could  say,  "Yes,  there  is  enough;  you  and  we  can 
both  have  what  we  want" ;  or  else,  "No,  there  is  not  enough ; 
you  and  we  must  both  curtail  our  projects  and  reconcile  them." 
The  Allies,  for  instance,  asked  for  many  more  Liberty  engines 
than  they  actually  received.  Had  they  been  business  competi- 
tors of  the  American  Government,  they  might  have  secured 
many  more  than  they  did — at  the  expense  of  our  own  air  pro- 
gram. The  Commission  knew  definitely  how  many  engines 
could  be  delivered  within  certain  specified  dates  and  rationed 
the  engines  to  the  Allies. 

The  mechanism  of  the  Purchasing  Commission  was  simple 
enough.  It  held  its  meetings  frequently,  often  daily.  At  these 
sessions  the  representatives  of  the  Allied  Governments  met 
with  heads  of  commodity  sections  of  the  War  Industries  Board, 
and  with  representatives  of  the  priorities  organization,  the 


Photo  by   G  ess  ford 


ROBERT  S.  LOVETT 


ALLIED  PURCHASES  89 

Treasury,  and  the  War  Trade  Board.  The  business  manager 
of  the  Commission  presided.  The  meetings  took  up  what  we 
both  needed  and  what  we  could  both  have. 

During  one  year  Belgium  bought  through  the  Commission 
goods  worth  upwards  of  $13,000,000;  Great  Britain,  in  round 
numbers,  $414,000,000;  France,  $352,000,000;  Italy,  $143,- 
000,000;  and  Russia,  $19,000,000 — a  total  of  almost  a  billion 
dollars.  This  sum  represents  only  the  controlled  buying  for 
one  year.  Count  in  the  existing  contracts  made  by  the  Allies 
before  the  creation  of  the  Commission,  and  also  the  contracts 
made  by  the  Allied  Governments  directly  with  the  United 
States  Government  itself,  and  the  total  amount  of  Allied  pur- 
chasing in  the  United  States  would  be  seen  to  have  been  sub- 
stantially greater.  At  the  time  of  the  organization  of  the  Pur- 
chasing Commission  each  Allied  Government  held  contracts  in 
the  United  States  for  a  large  amount  of  materials;  and  also 
many  large  Allied  contracts  existed  with  governmental  bureaus 
for  such  things  as  explosives  and  chemicals.  The  bureaus 
included  these  purchases  within  their  own  requisitions,  so  that 
no  specific  knowledge  of  them  came  to  the  War  Industries 
Board. 

Imagine  what  dumping  a  billion  dollars  of  demand  would 
have  done  to  an  uncontrolled  war  market!  The  Commission, 
besides  seeing  to  it  that  this  vast  influx  of  money  did  nothing 
to  prices,  saved  in  many  related  ways.  The  Allies  secured  the 
benefit  of  the  American  controlled  prices,  and  we  the  benefit 
of  not  having  to  lend  the  Allies  excess  sums  with  which  to  pay 
inflated  bills.  Moreover,  the  Commission  put  the  Allies  in 
touch  with  original  sources  of  supply ;  and  the  middleman  and 
the  jobber  and  agent  were  left  (where  they  belong  in  war)  on 
the  outside. 

The  extreme  need  of  supplying  the  Allies  as  well  as  our- 
selves with  the  impedimenta  of  war  may  not  be  evident  at 
first  glance.  We  Americans  are  so  accustomed  to  buying  of 
ourselves  and  so  little  used  to  seeing  "Made  in  U.  S.  A."  upon 
anything  we  buy — because  practically  everything  we  buy  is 


90  THE  GIANT  HAND 

so  made — that  we  have,  as  a  people,  little  comprehension  of 
the  delicate  balance  of  trade  against  trade  that  exists  abroad. 
England,  of  course,  imports  much  more  food  than  she  grows. 
She  exports  coal  and  finished  products;  but  to  keep  her  indus- 
tries going  she  must  import  cotton,  wool,  and  iron.  France  has 
certain  resources  of  coal  and  iron,  but  not  enough.  Her  skill 
in  making  many  things  keeps  her  exports  constantly  flowing. 
We  import  largely,  it  is  true ;  but,  with  a  few  vital  exceptions, 
we  do  not  have  to  import  to  live.  An  enemy  could  blockade 
us  in,  and  the  normal  processes  of  domestic  trade  and  indus- 
try could  go  on  indefinitely. 

When  the  war  came  to  Europe  it  took  from  her  industries 
her  best  workmen.  The  war  took  some  of  ours,  too;  but  our 
4,000,000  soldiers  from  110,000,000  people  were  few  when 
compared  to  the  proportion  of  men  taken  from  the  industries  of 
France  and  England.  With  industries  dependent  upon  dimin- 
ished imports  and  further  weakened  by  the  loss  of  workmen, 
they  had  to  have  what  we  made,  or  go  under.  Germany  would 
have  gone  down  long  before  she  did,  had  she  not  been  laying 
up  war  supplies  for  forty  years.  Her  foresight  had  extended  to 
such  policies  as  a  governmental  encouragement  of  the  use  of 
copper  in  roofs  and  cooking  utensils  by  the  German  people,  in 
order  that  Germany,  in  the  day  of  need,  might  have  an  ade- 
quate supply  of  that  vital  war  metal. 

And  so  we  listened  to  the  war  demands  of  the  Allies,  and 
we  heard  not  a  polite  request,  but  a  cry  of  despair,  that  held 
for  us  the  same  sinister  implication  that  it  did  for  England 
and  Belgium  and  France.  We  heard  the  cry  and  heeded  it.  To 
heed  it  we  had  to  increase  our  production,  conserve  our  mate- 
rials, curtail  their  nonessential  use,  substitute  the  plentiful 
material  for  the  scarce,  and  regulate  imports  and  exports. 

The  War  Industries  Board  was  considered  by  some  to  lack 
an  essential  power  in  that  it  held  no  direct  control  over  exports 
and  imports.  But  it  no  more  required  that  power  than  it  did 
authority  to  command  troops,  or  to  control  railroad  operation, 
or  the  ability  to  dictate  the  number  of  sugar  lumps  on  a  hotel 
table.  These  and  other  necessary  powers  all  resided  in  the 


ALLIED  PURCHASES  91 

Government,  and  they  were  all  interlocked.  In  April,  May, 
and  June,  1918,  much  new  governmental  machinery  was 
created  and  taken  over  by  some  of  the  best  brains  in  this  coun- 
try. These  new  officials  were  business  men,  men  to  whom  the 
red  tape  of  bureaucracy  and  the  jealousy  of  small  minds  re- 
garding precedent  and  official  encroachments  were  alien  in 
thought  and  unknown  in  practice.  These  men  readily  brought 
about  coordination  of  the  war  powers. 

The  War  Trade  Board,  through  the  Espionage  Act  and  the 
Trading  with  the  Enemy  Act,  had  absolute  power  to  license 
and  do  what  it  would  with  imports  and  exports.  The  Shipping 
Board  procured  and  operated  the  ocean  tonnage.  For  several 
months  it  managed  it,  too;  but  in  1918  a  new  organization, 
known  as  the  Shipping  Control  Committee,  took  charge  of  our 
merchant  marine.  Ships  thereafter  sailed  or  stayed  in  port  at 
the  behest  of  the  Shipping  Control  Committee. 

From  these  and  other  official  agencies  of  control,  whatever 
cooperation  the  War  Industries  Board  needed  it  readily  se- 
cured. It  did  not  desire  and  could  not  have  exercised  the  great 
powers  of  its  sister  organizations ;  but  when  for  its  own  ends  it 
did  need  the  exercise  of  one  or  another  of  these  collateral  war 
powers,  it  had  no  trouble  in  obtaining  it.  The  heads  of  the 
emergency  war  agencies  worked  in  close  cooperation. 

Much  is  said  in  this  book  about  control.  We  controlled  this 
and  controlled  that — we  managed  business  and  industry  and 
civilian  life  in  many  of  its  contacts.  It  was  control  in  the 
sense  that  the  power  was  there,  but  the  power  was  seldom 
needed.  The  real  factor  of  control  was  the  volunteer  spirit 
among  those  whom  the  control  touched.  The  acts  of  the  war 
agencies  also  had  behind  them  a  wholesome  fear  of  public 
opinion  on  the  part  of  those  who  might  otherwise  have 
resisted. 

One  recalcitrant  lumber-mill  owner  sat  unmoved  through 
the  deliberations  of  a  committee  of  the  War  Industries  Board. 
When  the  meeting  was  over  he  announced  himself  as  fol- 
lows: "I  am  a  free  American  citizen  and  my  mill  is  my  own. 
I  won't  make  your  product  for  you  at  any  such  price.  I  am  in 


92  THE  GIANT  HAND 

business  to  make  money;  and  if  you  people  are  going  to  run  a 
war,  you  are  going  to  pay  me  for  my  share  in  it — I  didn't  ask 
to  go  into  the  war.  I'll  shut  up  the  shop  and  lock  the  doors 
before  I  will  submit  to  your  dictation.  .  .  ." 

"Oh,  no,  you  won't,"  he  was  told.  "Think  it  over — what  it 
would  mean  for  you.  Suppose  we  have  to  take  over  your  plant. 
Everybody  would  know  about  it.  Your  home-town  newspapers 
would  print  the  story.  All  your  workmen  would  know  why 
they  were  working  for  the  Government  instead  of  for  you.  The 
fathers  of  all  the  boys  who  have  gone  to  France  from  your 
town  would  have  it  in  for  you.  The  people  in  your  church 
might  not  want  you  in  the  building,  and  maybe  you  couldn't 
find  any  merchants  willing  to  sell  you  any  food  or  clothing. 
You  would  become  a  pariah  in  your  own  community.  You 
may  not  want  to  do  this  thing,  and  we  can't  seem  to  move  you 
to  see  that  it  has  to  be  done;  but  we  won't  have  to  appeal  to 
anything  except  public  opinion  in  your  town  to  see  that  it  is 
done."  And  the  man  had  to  give  in.  He  might  have  stood  up 
against  a  government  institution,  but  he  could  not  withstand 
the  power  of  public  opinion. 

The  War  Industries  Board  was  an  evolution,  rather  than  a 
creation;  hence  it  is  not  strange  to  find  that  certain  of  its 
branches  were  found  not  to  be  well  adapted  to  the  functions 
they  were  supposed  to  perform.  Certain  branches  were  cut  off 
when  they  seemed  to  be  of  no  more  use.  The  Board  was  con- 
structed by  human  beings,  and  therefore  it  sometimes  made 
mistakes.  It  tried,  however,  to  profit  by  its  errors  and  to  build 
the  more  strongly  from  the  wreckage  of  mistaken  building.  It  is 
not  possible  here  to  tell  the  whole  story  of  what  the  War 
Industries  Board  did.  We  can  but  take  up  its  chief  activities 
and  touch  lightly  upon  a  few  of  its  more  obscure  miscellaneous 
enterprises.  No  account  of  its  work,  however,  would  be  ade- 
quate, if  it  did  not  mention  the  subject  of  "clearance." 

Clearance  in  war  industry  was  a  war  tool  invented  to  fill 
a  certain  need.  Industrial  clearances  were  administered  at  first 
by  a  Clearance  Committee,  which  failed  to  function  well.  The 
underlying  idea,  however,  was  too  valuable  to  drop;  and  to 


Photo  from  Kissel  Motor  Car  Company 

CHASSIS  OF  ORDNANCE  TRUCKS 


Photo  from   Winslow  Brothers   Company 

WOMEN  MUNITIONS  WORKERS  QUENCHING  SHELL 
FORCINGS  AFTER  HEAT  TREATMENT 


ALLIED  PURCHASES  93 

the  end  the  Board  kept  the  control  of  clearances  as  a  factor  in 
war  production,  although  the  form  of  its  administration 
changed. 

Offhand  it  may  be  a  bit  difficult  to  distinguish  clearance 
from  priority;  but  there  was  a  difference,  as  we  shall  see.  To 
understand  it,  consider,  in  the  first  place,  how  imperfect  was 
the  information  on  which  we  were  to  base  an  intelligent  war 
program.  We  did  not  know  what  we  had  or  what  we  needed 
or  where  we  were  going  to  get  anything.  Our  first  problem  was 
to  determine  what  we  had  to  produce.  We  did  not  know  what 
we  could  ship,  because  of  the  uncertainties  of  the  tonnage 
situation.  We  knew  neither  how  big  an  Army  we  were  going  to 
raise  nor  what  that  Army  would  consume  after  we  had  raised 
it.  Our  military  authorities  had  never  contemplated  consump- 
tion in  terms  of  millions  of  men.  Moreover,  our  military  lead- 
ers in  France  were  constantly  changing  the  standards  of  army 
requirements. 

We  had  an  Army,  a  Navy,  an  Emergency  Fleet  Corporation, 
and  an  Allied  Purchasing  Commission,  not  to  speak  of  the  Red 
Cross,  all  of  them  prodigious  demanders  of  the  products  of 
industry.  Nor  were  they  simply  four  or  five  individual  con- 
sumers— the  problem  would  have  been  easier  if  they  had  been. 
The  trouble  was  that  the  Army  bought  through  five,  and  later 
through  eight,  separate  purchasing  agencies,  all  trying  to  buy 
essentially  the  same  things  at  the  same  time,  and  each  bidding 
furiously  against  the  others.  Each  one,  moreover,  was  working 
on  its  own  program ;  each  had  its  own  conception  of  how  much 
of  anything  to  buy;  and  the  confusion  in  industry  became 
indescribable.  Sources  of  supply  were  overloaded,  deliveries 
postponed  to  the  remote  future,  the  more  important  and 
accessible  manufacturing  districts  congested  with  work,  and 
any  coherent  supply  plan  was  rendered  impossible. 

The  Munitions  Board  in  the  first  place  promptly  saw  that 
this  wouldn't  do.  It  formed  the  Clearance  Committee,  which 
in  turn  prepared  a  clearance  list  of  articles  and  materials  the 
supplies  of  which  were  short.  Thereafter,  any  bureau  which 
wanted  to  buy  any  of  the  short  supplies  had  to  get  clearance 


94  THE  GIANT  HAND 

from  the  Committee  before  the  order  could  be  placed.  The 
committee  quarters  became  a  meeting  ground  for  the  purchas- 
ing officers  of  all  the  big  buying  agencies.  But  this  was  only  a 
temporary  expedient,  and  it  was  ineffective,  because  the  repre- 
sentative of  one  purchasing  department,  himself  perhaps  plac- 
ing thousands  of  orders,  could  not  keep  track  of  competing 
orders  merely  by  memory  after  he  heard  them  read  from  the 
list.  The  War  Industries  Board  reorganized  the  Committee 
in  May,  1918;  and  thereafter,  since  the  Committee  then  func- 
tioned only  with  reference  to  immediate  orders,  as  distin- 
guished from  future  requirements,  the  manipulation  of  clear- 
ances worked  better.  Two  months  later,  however,  in  July,  the 
whole  system  was  jettisoned.  The  Committee  was  unwieldy. 
Every  section  of  the  War  Industries  Board  had  representation 
on  the  Committee,  and  there  had  now  come  to  be  many  sections 
in  the  Board.  Moreover,  the  commodity  sections  were  now  get- 
ting into  their  stride,  and  each  found  that  it  could  control 
clearances  of  orders  in  its  own  particular  field  without  the  aid 
of  the  Committee. 

So  the  Clearance  Committee  gave  way  to  a  Clearance  Office, 
and  the  difficulties  were  ironed  out.  The  Clearance  Office 
undertook  to  tell  each  and  every  purchasing  agency  what  all 
the  others  were  trying  to  buy,  to  collect  all  purchasing  plans, 
and  to  pool  them.  When  a  requirement  had  ripened  to  a  full- 
grown  order,  it  would  be  placed,  not  with  a  manufacturer,  but 
with  the  Clearance  Office.  The  Clearance  Office  alone  knew  if 
the  order  could  be  filled ;  and  if  it  could,  it  was  referred  to  the 
proper  commodity  section.  The  commodity  section  might  re- 
ceive notice  of  a  dozen  similar  prospective  purchases  from  a 
dozen  agencies,  and  the  result  was  a  sheet  of  paper  holding  the 
total  current  need  for  any  particular  supply.  Knowing  this 
need,  the  section  could  lay  plans  to  make  the  available  supply 
of  most  use  to  the  Government.  The  system  also  made  it  possi- 
ble to  distribute  the  several  orders  throughout  the  country  and 
not  congest  them  all  in  one  or  two  districts;  and  generally  it 
"made  ready  the  field  of  supply  against  the  invasion  of  imme- 
diate orders,"  as  the  official  report  puts  it. 


ALLIED  PURCHASES  95 

A  clearance,  when  issued,  might  carry  with  it  a  restriction 
as  to  the  area  in  which  the  order  could  be  placed.  In  such  an 
instance  the  commodity  section  would  be  avoiding  freight, 
power,  or  transportation  congestion.  A  clearance  might  only 
forbid  the  placing  of  the  order  in  certain  plants,  or  it  might 
be  coupled  with  an  inhibition  which  read,  "No  new  facilities  to 
be  created  to  fill  this  order."  The  clearance  might  definitely 
allocate  the  order  to  one  and  only  one  source  of  supply;  but 
whatever  the  restriction,  the  clearance  controlled  the  issuing 
of  the  buying  order  so  that  too  much  pressure  was  not  put  upon 
the  factory,  district,  power  system,  or  distribution  system,  or 
too  much  demand  made  upon  one  source  of  raw  material. 

The  clearance  system  never  was  perfect;  it  never  did  func- 
tion as  it  ought  to  have  functioned;  but  it  was  getting  more 
and  more  effective  as  it  passed  more  and  more  into  the  hands 
of  the  commodity  sections.  Like  other  war  industries  board 
changes,  the  change  in  the  administration  of  clearance,  from 
a  function  of  a  separate  organization  to  one  of  the  commodity 
sections,  had  to  be  made  gradually,  while  the  steady  flow  of 
work  went  on.  Any  adequate  plan  for  war  preparation  in  the 
future  will  include  a  clearance  office  as  part  of  its  organiza- 
tion. Experience  in  1918  showed  the  need  of  it.  One  depart- 
ment of  the  Government  handled  almost  28,000  clearances  in 
four  months  in  1918.  The  Clearance  Office  worked  swiftly.  It 
seldom  took  more  than  forty-eight  hours  to  issue  a  clearance, 
and  often  only  a  day. 

The  War  Industries  Board  dealt  with  iron  and  timber  and 
bloodless  incorporate  organizations,  but  it  also  had  its  human 
side  and  its  human  contacts.  Indeed,  as  an  institution  it  was 
far  more  warm-blooded  than  are  most  governmental  agencies. 
It  had  to  be,  by  the  very  nature  of  its  work — dealing  as  it  did 
with  questions  of  life-and-death  importance  to  the  business 
structure  of  the  country  and  assuming  authority  not  specifically 
written  into  law.  It  was  human,  with  human  frailties  and 
human  strengths.  It  had  a  chairman  who  looked  not  on  tape 
when  it  was  red,  who  could  cut  across  lots  and  leap  over  the 


96  THE  GIANT  HAND 

fences  of  bureaucratic  tradition.  Being  agile  and  alive,  it 
could  function  even  while  it  was  rearing  the  structure  of  its 
organization.  General  Hugh  S.  Johnson,  the  assistant  chief 
of  the  Division  of  Purchase,  Storage,  and  Traffic,  said  of  the 
War  Industries  Board  that  its  simultaneous  formation  and 
functioning  was  like  the  spectacle  of  an  old  railroad  bridge 
being  replaced  with  a  new  structure  while  all  the  time  the 
express  trains  were  running  across. 

One  of  the  Board's  human  contacts  was  with  labor.  The 
share  of  labor  in  the  war  has  been  celebrated  justly.  Without 
the  whole-hearted  cooperation  of  the  men  who  dug,  shoveled, 
switched  cars,  drove  engines,  built,  and  produced,  we  could 
have  done  little  in  the  war.  The  spirit  of  labor  throughout 
the  war  was  the  true  spirit  of  victory — to  make  the  thing  and 
get  it  done,  to  beat  the  record  driving  rivets  or  cutting  spruce, 
to  move  the  cars  though  it  took  twenty  hours'  duty  out  of  the 
twenty-four,  to  keep  the  soldier  brother  and  son  supplied — to 
win,  without  undue  thought  for  wages,  hours,  and  all  that 
labor  fights  for. 

One  of  the  strong  influences  leading  to  this  attitude  on  the 
part  of  labor  was  Mr.  Hugh  Frayne,  the  labor  member  of  the 
War  Industries  Board  and  head  of  the  Labor  Division  of  that 
organization.  He  had  much  to  do  with  making  labor  con- 
tented with  conditions  in  the  war  industries.  Mr.  Frayne  was 
a  labor  man  in  upbringing  and  point  of  view,  and  the  tradi- 
tions and  ideals  of  labor  were  strong  within  him.  He  had  the 
broad  vision  of  the  man  who  sees  beyond  the  little  horizon  of 
to-day.  Mr.  Frayne  met  with  the  Board  daily  throughout  its 
existence.  He  knew  its  personnel.  He  was  in  close  and  inti- 
mate touch  with  all  its  members.  He  sat  in  the  councils  and 
knew  its  decisions  and  the  reasons  for  them.  If  those  decisions 
were  such  as  would  hurt  labor — and  many  of  its  decisions 
were  such,  because  the  needs  of  the  war  program  were  greater 
than  any  other  needs — Mr.  Frayne,  at  any  rate,  had  a  voice 
in  the  decisions,  understood  why  they  were  made,  and  after- 
wards made  labor  understand  why.  He  carried  to  labor  the 
enthusiasm  and  prescience  of  Mr.  Baruch,  the  judicial  atti- 


Phcto  by  Harris  6?  Ewing 


HUGH  FRAYNE 


ALLIED  PURCHASES  97 

tude  of  Judge  Parker,  the  fighting  spirit  of  Mr.  McLennan, 
the  calm,  ironclad  logic  of  Mr.  Legge,  the  thoroughness  of  Mr. 
Brookings,  and  the  qualities  of  the  others,  all  of  which  made 
up  the  composite  spirit  of  the  War  Industries  Board. 

Mr.  Frayne  worked  by  personal  contact  whenever  possible. 
During  his  service  he  had  upwards  of  250  conferences  with 
labor  representatives  from  all  over  the  country;  and  in  these 
meetings  he  spent  himself  without  stint  to  make  the  labor 
people  see  and  carry  back  to  those  who  sent  them  the  spirit 
of  the  Board  and  of  the  Government.  He  held  more  than  550 
conferences  with  employers,  industrial  and  governmental ;  and 
he  made  them  see  that  even  though  a  war  was  being  fought,  the 
victory  would  be  a  sorry  one  if  the  labor  backbone  of  industry 
were  damaged.  A  mobile  army  of  over  125,000  war  laborers 
of  all  kinds  flocked  to  Frayne' s  banner  at  his  call;  and  these 
cohorts  he  shifted  here,  there,  and  elsewhere  the  country  over, 
as  labor  needs  arose  in  war  industry. 

He  also  settled  strikes  and  composed  grievances.  Those 
there  be  who  hold  that  any  strike  in  time  of  war  is  a  crime. 
If  so,  it  sometimes  occurs  because  of  a  greater  crime  which  has 
preceded  it.  The  profiteer,  the  grasping  factory  owner,  the 
unheeding  corporation  we  had  with  us  always;  and  some  of 
them  lost  sight  of  the  fact  that  the  war  was  not  being  con- 
ducted for  their  private  benefit.  They  saw  in  the  war  emer- 
gency their  opportunity  to  make  headway  in  the  eternal  strug- 
gle with  labor.  Mr.  Frayne  and  his  Division  composed  many 
such  conflicts,  conciliated  the  manufacturers,  toned  up  labor's 
willingness  to  sacrifice,  and,  in  one  way  or  another,  kept  the 
wheels  turning. 

The  Labor  Division  was  responsible  for  a  number  of  achieve- 
ments other  than  keeping  labor  in  touch  with  the  plans  of  the 
War  Industries  Board  and  enlisting  labor's  cooperation  in  those 
plans.  It  brought  to  the  Price  Fixing  Committee  the  attitude 
of  labor,  so  that  a  fixed  price  carried  adequate  compensation 
to  labor.  It  worked  out  a  plan  to  issue  a  distinctive  service 
button  to  laborers  in  munitions  plants,  though  the  armistice 
cut  short  this  project.  The  war  training  and  dilution  of  labor 


98  THE  GIANT  HAND 

were  largely  planned  in  the  Labor  Division,  although  these 
activities  were  administered  by  the  War  Labor  Policies  Board. 
Mr.  Frayne  organized  within  the  War  Industries  Board  the 
War  Prison  Labor  Section,  which  arranged  opportunities  for 
prisoners  in  penitentiaries  and  jails  to  do  work  for  their  coun- 
try; and  also  the  Natural  Waste  Reclamation  Section,  which 
studied  methods  of  reclaiming  waste  products.  The  Army's 
salvage  system,  of  which  so  much  has  been  said  and  written, 
had  its  inception  in  these  studies. 

The  Division  helped  the  Army  in  its  plans  to  find  useful 
places  for  men  unfit  for  active  combat.  It  also  aided  in  formu- 
lating the  compulsory  work  regulations.  The  famous  work-or- 
fight  orders  of  General  Crowder,  the  provost  marshal  general, 
were  largely  predicated  upon  studies  of  this  Division ;  and  the 
Division  also  disseminated  the  orders  throughout  the  country. 

All  in  all,  the  Labor  Division  was  one  of  the  most  important 
parts  of  the  War  Industries  Board.  There  was  no  officer  of  the 
Board  who  gave  himself  more  loyally  or  produced  more  vital 
and  important  results  than  Hugh  Frayne. 


CHAPTER  VII 
COMMODITY  SECTIONS— STEEL 

MR.  BARUCH  and  the  well-known  manufacturer 
of  table  relishes  had  a  similar  fondness  for  the 
mystic  number  fifty-seven:  at  least,  one  of  them 
produced  that  number  of  varieties  of  pickles,  and  the  other 
created  the  same  number  of  commodity  sections  within  the 
War  Industries  Board.  We  are  now  considering  the  very  vitals 
of  the  War  Industries  Board;  for  that  is  what  the  commodity 
sections  were.  They  were  the  collectors  of  industrial  informa- 
tion, the  agents  which  carried  out  the  behests  of  the  Board, 
and  the  wires  which  connected  the  Board  intimately  with  the 
forests,  mines,  and  workshops  of  the  land. 

American  industry  plugged  in  on  the  War  Industries 
Board  through  these  fifty-seven  sections.  Industry,  in  its 
various  branches,  put  forth  its  own  wires  to  complete  the 
circuit  of  centralized  control.  These  industrial  wires  were 
called  war-service  committees,  and  they  were  formed  by  the 
United  States  Chamber  of  Commerce.  The  whole  scheme 
of  cooperation  between  the  government  control,  functioning 
through  the  commodity  sections,  and  industry,  represented 
by  its  war-service  committees,  was  the  brain-child  of  the 
chairman  of  the  War  Industries  Board.  A  marvel  of  sim- 
plicity and  efficiency,  the  plan  was  Mr.  Baruch's  chief  con- 
tribution to  the  organization  of  the  Government  for  war. 
There  were  many  war-service  committees  in  existence  at  the 
time  of  the  armistice,  each  representing  some  major  phase 
of  business  or  industry.  They  all  advised  with  the  commodity 
sections  to  which  they  were  related,  bringing  to  the  sections 
information,  and  taking  to  their  respective  provinces  of  war 
enterprise  the  plans  of  the  Board  as  a  whole. 


ioo  THE  GIANT  HAND 

Here  was  organization  at  once  both  centralized  and  decen- 
tralized. The  individual  factory,  the  association  of  related 
factories,  the  war-service  committees  represented  the  associa- 
tions, and  the  appropriate  commodity  sections — each  of  the 
last  performing  a  special  function  for  the  Board — lay  spread 
out  under  the  eye  of  the  chairman,  who  in  turn  represented  the 
President.  Authority  could  easily  exert  itself  under  this  plan. 
Yet  each  war-service  committee  and  its  related  commodity 
section  together  formed  a  little  administrative  world  unto 
themselves.  Leather,  steel,  copper,  nitrates,  wool,  optical 
instruments,  and  half  a  hundred  other  commodities,  each  rep- 
resented on  the  industrial  side  by  a  war-service  committee  and 
on  the  governmental  side  by  a  commodity  section,  by  this 
arrangement  came  under  centralized  control  with  a  minimum 
of  interferences. 

The  commodity  sections  stood  between  the  purchasing 
bureaus  of  the  Government  and  the  producing  industries.  It 
was  important,  then,  that  the  bureaus  have  a  voice  in  affairs; 
and  consequently  each  commodity  section  included  in  its  mem- 
bership a  representative  of  each  purchasing  bureau  which  used 
that  particular  commodity.  It  was  also  important  that  each 
section  chief  know  what  was  going  on  in  the  whole  Board. 
Therefore  Mr.  Baruch  called  weekly  Monday  meetings  of  all 
section  chiefs,  at  which  meetings  the  chairman  put  the  chiefs 
in  touch  with  all  the  activities  of  the  whole  great  machine. 

Each  commodity  section  was  a  grouping  of  experts.  Natu- 
rally such  organizations  did  not  materialize  overnight  by  any 
magic  process.  They  were  in  many  instances  developments  of 
pioneer  committees  and  branches  of  the  Council  of  National 
Defense  and  General  Munitions  Board.  Thus  they  brought 
with  them  and  embodied  in  themselves  the  fruit  of  Mr. 
Baruch's  labors  in  those  predecessors  of  the  Board;  for  raw 
materials,  it  will  be  remembered,  were  Baruch's  particular 
charge  before  he  became  head  of  the  Board.  Indeed,  as  early  as 
1916  and  purely  as  an  interested  civilian,  Baruch  had  begun 
studying  our  national  raw  materials  and  their  possible  use  in 
war,  little  dreaming  of  the  part  he  was  to  play  in  their  actual 


Photo  from    Winchester  Repeating'  Arms    Company 

TESTING  ARMY  RIFLES 


Photo  from  David  Lup  ton's  Sons   Company 

COMPLETED  6-INCH  TRENCH  MORTARS 


COMMODITY  SECTIONS— STEEL  101 

employment.  The  Committee  on  Supplies  and  the  Committee 
on  Raw  Materials  of  the  Council  of  National  Defense  called 
into  service  expert  after  expert,  as  need  for  them  arose,  and 
many  of  these  specialists  later  on  became  chiefs  of  commodity 
sections  of  the  War  Industries  Board. 

It  was  the  business  of  a  commodity  section  to  gather  and 
systematize  information,  to  learn  all  there  was  to  be  learned 
about  existing  production  and  the  possibilities  of  future  pro- 
duction in  its  own  field,  and  then  to  put  into  effect  such  plans 
as  might  be  needed  to  make  the  possible  production  equal  to 
the  probable  demand.  To  this  end  many  questionnaires  were 
sent  out  'and  complete  surveys  made  of  whole  industries.  In 
the  development  of  maximum  production  numerous  high- 
minded  concerns  exhibited  a  fine  spirit  of  self-sacrifice  for  the 
common  end  by  surrendering,  for  free  use  by  their  peace-time 
competitors,  their  most  jealously  cherished  factory  secrets. 
Only  war  could  have  brought  that  about. 

The  underlying  policy  of  the  Board  was  based  on  coopera- 
tion rather  than  force.  The  Board  could  commandeer  plants, 
but  it  could  not  commandeer  good  will.  In  place  of  com- 
mandeering, a  commodity  section,  facing  an  unusual  or  critical 
condition,  called  upon  its  war-service  committee,  laid  the  diffi- 
culty before  the  membership  of  that  committee,  asked  for  its 
help  and  suggestions,  and  thus  learned  the  point  of  view  of 
the  industry.  The  plan  finally  adopted  was  one  which  would 
best  serve  both  the  United  States  and  industry;  and  the  indus- 
try usually  responded  to  its  capacity  when  its  war-service  com- 
mittee sent  out  the  word:  "We,  acting  for  you,  have  agreed 
with  the  commodity  section  acting  for  the  War  Industries 
Board  that  thus-and-such  is  to  be  done." 

In  the  first  creation  of  the  commodity  sections  a  mistake 
was  made — a  mistake  of  organization.  In  the  beginning  Mr. 
Baruch  delegated  his  authority  to  the  section  chiefs  and  not 
to  the  sections  themselves.  This  immediately  created  an  awk- 
ward condition.  Section  chiefs  virtually  represented  Supply, 
since  that  was  what  they  dealt  with  primarily.  But  within  the 
sections  themselves,  as  part  of  them,  were  the  representatives 


102  THE  GIANT  HAND 

of  the  purchasing  departments  of  the  Government — Demand. 
Demand  therefore  had  no  authority ;  and  naturally  it  could  not 
join  heartily  in  an  undertaking  in  which  it  had  no  real  voice. 
When  the  authority  was  vested  in  the  whole  section,  as  it  soon 
was,  and  not  in  its  chief  alone,  there  was  a  new  face  on  the 
situation.  Thereafter  the  sections  worked  effectively.  The  pur- 
chasers and  producers  fought  out  their  differences  over  the  con- 
ference tables  and  settled  them.  The  chairman  of  the  Board 
almost  invariably  refused  to  act  as  umpire.  Only  twice  did  he 
break  the  rule  and  consent  to  decide  questions  on  which  sections 
were  unable  to  agree.  Mr.  Baruch  made  the  responsibility  of 
his  subordinates  as  absolute  as  their  authority. 

Nor  did  the  chairman  restrict  the  freedom  of  the  sections 
with  such  rigid  regulations  and  specific  instructions  as  would 
limit  their  activities.  Broad  policies  there  had  to  be,  and  were ; 
but  these  commodity  sections  dealt  with  fifty-seven  different 
kinds  of  commodities,  every  one  of  which  presented  its  own 
problems.  The  rules  that  might  do  for  one  kind  would  only 
embarrass  a  section  dealing  with  another. 

Under  the  surface  in  Washington  all  was  not  always  har- 
monious. During  that  first  war  year  Washington  was  one  large 
mass  of  confusion;  and  in  fact  the  pulling  at  cross-purposes 
in  the  War  Government  never  altogether  ceased.  Duplications 
of  work  existed  throughout  the  war  period,  jealousies  smol- 
dered, incompetents  entrenched  themselves  in  high  position, 
and  able  men  were  wrongly  placed  in  the  organization.  To  the 
War  Industries  Board,  one  group  of  arch-irritants  caused  more 
trouble  than  any  other.  This  group  comprised  the  officer  hide- 
bound to  departmental  tradition,  the  slave  to  formal  pro- 
cedure, the  stiff-necked  innovator  whose  innovations  were 
impracticable  or  inefficient,  the  misguided  designer  of  mate- 
rials, unwilling,  in  his  eagerness  to  produce  something  better 
and  to 'show  the  Europeans  how  American  industrial  genius 
could  transcend  their  best  efforts,  to  accept  what  the  experience 
of  the  Allies  had  demonstrated  to  be  of  value.  The  class  was 
familiar.  The  ultimate  embodiment  of  it  was  the  man  in 
authority  unable  to  understand  that  time  was  more  impor- 


COMMODITY  SECTIONS— STEEL  103 

tant  than  perfection,  that  deliveries  were  infinitely  more  vital 
than  prices,  that  the  emergency  was  one  of  the  immediate  Now, 
and  that  plans  and  programs  could  not  be  left  to  the  calm 
deliberation  and  leisurely  decision  of  less  hurried  times. 

Yet  the  War  Industries  Board  managed  to  deal  even  with 
such,  and  its  record  is  not  marred  by  failure  to  deliver  any 
ordered  materials  on  time.  For  that  record  it  could  thank  its 
commodity  sections.  And  if,  in  the  process  of  driving  the  manu- 
facturing projects  through  to  completion,  the  obstructionists 
were  removed ;  if  certain  dignitaries  found  themselves,  on  rep- 
resentations made  by  the  Board,  gently  but  firmly  eased  out 
of  their  swivel  chairs  and  transferred  to  honorary,  but  less 
important,  fields  of  endeavor;  and,  finally,  if  these  outraged 
personages  thereafter  had  only  harsh  words  for  the  War  Indus- 
tries Board  and  particularly  for  its  chairman — that,  too,  was 
part  of  the  day's  work,  and  a  thing  which  had  to  be  accepted. 

A  fact  which  has  already  been  mentioned  briefly,  and  the 
importance  of  which  should  not  be  overlooked,  is  that  the 
fifty-seven  commodity  sections  worked  in  close  relationship 
with  each  other.  In  the  large  weekly  meetings  each  section  chief 
gained  a  general  idea  about  what  was  going  on  in  the  whole 
Board.  But  there  was  a  day-to-day  intimacy  of  even  greater 
practical  value.  By  the  nature  of  things  the  sections  could  not 
be  independent  of  each  other,  because  each  represented  a 
branch  of  industry,  and  the  branches  of  industry  are  not  inde- 
pendent. Nearly  every  manufacturer,  for  instance,  has  to  have 
coal.  One  can  not  make  glass  out  of  air — one  must  have  sand, 
chemicals,  and  other  things.  The  instrument  maker  needs  raw 
materials  from  the  metal  industries ;  iron  means  coke  and  lime- 
stone as  well  as  ore;  and  all  industries  have  to  have  tools. 
Then,  too,  the  commodity  sections  helped  to  fix  prices,  and 
they  administered  the  prices  thus  fixed;  and  in  that  they  had 
to  work  together,  because  seldom  could  a  price  be  fixed  for 
any  one  commodity  without  the  necessity  of  fixing  the  prices 
of  other  commodities  which  entered  into  the  production  of  the 
first.  The  commodity  sections  were,  then,  fifty-seven  cog 
wheels,  no  one  of  which  turned  without  turning  others  with  it. 


104  THE  GIANT  HAND 

And  what  a  range  of  human  work  their  activities  covered: 
nothing  less  than  the  entire  sum  of  industry,  whether  directly 
or  indirectly  related  to  war!  To  show  how  war  industry  was 
divided  up  into  a  group  of  controls,  the  full  list  of  the  com- 
modity sections  is  here  set  down,  not  by  their  official  names, 
but  in  terms  of  the  commodities  with  which  they  dealt. 


Iron  and  steel 

Copper  and  zinc 

Brass 

Ferro-alloys 

Tin 

Aluminum  and  pyrites 

Acids  and  heavy  chemicals 

Alkalies  and  chlorine 

Ethyl  alcohol 

Cotton  linters 

Explosives 

Artificial  dyes  and  interme- 
diates 

Industrial  gas  and  gas 
products,  including  toluol 

Saccharine 

Acetylene  and  oxygen 

Creosote 

Tanning  materials  and  nat- 
ural dyes 

Paints  and  pigments 

Wood  chemicals 

Miscellaneous  chemicals 

Refractories 

Ceramics 

Electrodes  and  abrasives 

Chemical  glass  and  stone- 
ware 

Asbestos  and  magnesia 

Mica 


Medical  supplies 

Tobacco 

Lumber 

Building  materials 

Wood  products  (not  in- 
cluding wood  chemicals) 

Pulp  and  paper 

Cotton  goods 

Woolen  knit  goods 

Felt 

Silk 

Flax  products 

Jute 

Hemp  and  cordage 

Hides 

Leather  and  leather  goods 

Rubber  and  rubber  goods 

Machine  tools 

Forgings 

Ordnance 

Small  arms  and  small-arms 
ammunition 

Hardware  and  hand  tools 

Cranes 

Chains 

Military  optical  glass  and 
instruments 

Automotive  products 

Railway  equipment  and 
supplies 


COMMODITY  SECTIONS— STEEL  105 

Power  Boilers 

Electrical  and  power  equip-  Condensers      and      similar 

ment  equipment 
Steam  turbines 

The  reader  notes  that  some  of  the  commodity  sections  dealt 
with  raw  materials,  some  with  semi-finished  materials,  and 
others  with  finished  products.  Each  of  these  sections  repre- 
sented a  war  industrial  problem.  Sometimes  a  problem  of 
supply  existed  in  raw  materials,  sometimes  only  in  finished 
products.  But  whenever  the  Government  began  to  experience 
difficulty  in  securing  enough  of  a  commodity,  whether  the  com- 
modity was  a  raw  mineral  or  some  highly  finished  mechanism, 
a  commodity  section  was  created  to  deal  with  that  difficulty 
and  smooth  it  out  if  possible.  Obviously  it  was  difficult  to  find 
men  qualified  to  act  as  chiefs  of  these  diverse  sections,  because 
of  the  Board's  rule  that  a  section  chief  could  not  be  financially 
interested  in  the  production  of  the  commodity  which  he  con- 
trolled. It  was  not  hard  to  find  men  who  understood  the  com- 
modities themselves;  but  where  would  the  Government  look 
to  find,  for  instance,  a  man  who  knew  all  about  the  manu- 
facture of  chains,  but  who  was  not  himself  a  chain  manu- 
facturer1? Yet  the  Board  procured  experts  qualified  to  fill  all 
these  positions.  This  was  in  itself  one  of  the  notable  feats  of 
those  who  built  up  the  organization. 

It  would  be  impossible  to  rate  the  sections  according  to  their 
importance.  What  is  the  most  important  part  of  a  motor  car^ 
It  can  not  run  without  wheels,  nor  yet  without  an  engine.  It 
can  not  be  driven  without  a  steering  wheel.  It  must  also  have 
a  gasoline  tank.  Under  the  hood,  in  the  timer,  is  a  tiny,  moving 
member  with  a  minute  platinum-  or  tungsten-tipped  contact 
point,  and  without  that  breaker  the  whole  automobile  is  as 
dead  as  a  last  week's  newspaper.  It  is  not  possible,  then,  to 
say  that  any  one  part  of  an  automobile  is  the  most  important 
part.  It  has  a  hundred  parts  equally  important,  since  the  whole 
will  fail  for  lack  of  any  of  them. 

So  with  the  materials  for  a  war  machine.  Obviously,  sol- 


106  THE  GIANT  HAND 

diers  can  not  fight  without  guns  and  ammunition,  but  that  fact 
does  not  make  guns  and  ammunition  the  most  important  tools 
of  war.  Neither  can  men  fight  unless  they  can  live,  and  to  live 
they  must  have  clothing  and  shoes,  among  other  things;  yet 
these  they  can  not  have  unless  there  be  leather,  cotton,  wool, 
thread,  needles,  and  buttons.  Our  armies  fought  three  thou- 
sand miles  from  home,  which  meant  that  everything  they  re- 
ceived from  home  had  to  go  to  them  in  ships.  We  could  not 
have  made  ships  without  rivets  and  riveters  and  wood  and 
steel.  Does  that  fact  make  wood  and  steel  the  two  most  impor- 
tant materials  for  the  war  machine'?  And  all  the  ships  in  the 
world  would  have  done  us  no  good,  had  we  had  no  powder  for 
the  guns.  Armies  can  not  function  nowadays  without  electrical 
communication,  which  in  turn  depends  upon  supplies  of  cop- 
per, lead,  and  glass.  To  be  sure,  for  some  of  the  materials 
controlled  by  commodity  sections  there  were  substitutes.  The 
war  ended  before  we  had  to  seek  many  substitutes,  but  Ger- 
many managed  to  get  through  the  war  with  little  or  no  rub- 
ber and  mighty  little  copper.  Certain  other  commodities  which 
we  controlled  might  perhaps  be  counted  of  less  importance 
because  the  quantities  required  were  small.  But  in  truth  there 
was  no  most  important  war  material.  All  were  necessary,  if 
any  were  to  be  of  use. 

There  was  no  substitute  for  steel,  and  no  other  material 
entered  so  largely  into  the  making  of  war  supplies.  Steel  is  the 
basic  metal  of  war.  Many  of  the  indispensable  tools  of  war  are 
built  of  steel,  and  all  war  supplies  depend  on  steel  for  either 
their  fabrication  or  their  transportation  and  nearly  always  for 
both.  Months  before  we  entered  the  war,  back  in  the  early 
days  of  the  Council  of  National  Defense,  Mr.  Baruch,  when 
he  became  chairman  of  the  Committee  on  Raw  Materials, 
began  to  plan  what  should  be  done  if  war  should  come  and  the 
demand  for  steel  should  go  beyond  any  ever  before  known.  Not 
at  first  was  it  understood  what  our  steel  industry  meant  to  us 
in  war — what  a  part  it  would  play.  The  war  came,  and  the 
first  estimate  of  the  experts  was  that  our  war  production 
would  require  not  more  than  seventeen  per  cent  of  America's 


COMMODITY  SECTIONS— STEEL  107 

then  annual  output  of  40,000,000  tons  of  iron  and  steel.  To- 
day this  estimate  reads  like  a  joke.  Seventeen  per  cent"?  To 
protect  itself  later  on,  the  Government  had  to  assume  control 
of  the  whole  steel  industry,  stimulating  production,  fixing 
prices,  rationing  and  curtailing  all  essential  uses  of  it,  cutting 
off  civilian  consumption  almost  altogether;  and  still,  notwith- 
standing the  augmented  output,  the  total  supply  of  American 
steel  never  came  within  hailing  distance  of  the  American  war 
demand  for  it. 

The  business  of  producing  steel  is  one  of  the  most  intricate 
and  highly  organized  of  industries,  as  well  as  one  of  the  larg- 
est ;  and  it  was  inevitable  that  fixed  prices  for  steel  should  work 
some  injustices.  Just  as  mill  efficiency  and,  more  important, 
the  cost  of  assembling  raw  materials  were  bound  to  vary  in  an 
industry  as  extensive  as  that  of  steel,  so  any  fixed  price  was 
likely  to  mean  prosperity  for  some  and  hard  times  for  others, 
if  the  price  were  set  with  regard  to  average  industrial  condi- 
tions. Moreover,  fixed  prices  had  to  prevail  all  the  way 
through,  from  the  iron  ore  and  pig  iron  to  the  finished  rods, 
rails,  and  plates.  Yet  it  was  highly  important  that  steel  prices 
be  fixed.  The  beginning  of  the  war  in  Europe  in  1914  saw  a 
slump  in  steel  prices  here,  but  in  1915  they  came  back  to  the 
prewar  norm,  and  after  that  they  began  to  mount.  Buying  on 
the  part  of  the  Allies,  plus  the  usual  domestic  demand,  com- 
bined with  the  rising  costs  of  everything  that  entered  into  the 
making  of  steel  to  lift  steel  prices  skyward.  Prices  soared,  even 
though  the  production  increased  enormously.  Up  to  1916  the 
industry  had  increased  the  production  of  pig  iron  70  per 
cent  and  that  of  steel  ingots  85  per  cent;  yet  the  end  of  1916 
saw  steel  prices  240  per  cent  above  the  prewar  norm.  Then 
came  our  entry  into  the  war,  and  the  previous  rises  began  to 
look  small.  Three  months  after  April  6,  1917,  we  faced  steel 
prices  370  per  cent  above  the  old  level.  Connellsville  coke 
jumped  in  price  from  $1.67  a  ton,  as  of  September,  1915,  to 
$12.25  a  ton  m  July*  1917-  In  tne  same  time  pig  iron  went 
from  $12.59  a  ton  to  $52.50.  Bessemer  billets,  which  had  cost 
$19.50  a  ton,  reached  $95;  and  steel  shapes,  which  sold  for 


io8  THE  GIANT  HAND 

$.012  a  pound  in  January,  1915,  mounted  to  $.062  a  pound 
by  July,  1917. 

Steel  led  the  procession  of  American  industries  into  the 
corral  of  government  control.  The  activities  of  the  official 
agencies  in  dealing  with  the  steel  people  created  the  precedents 
for  the  control  of  many  other  commodities.  At  first  there  was 
no  interference  with  the  industry  worth  mention.  There  was 
some  uninfluential  talk  of  commandeering  and  even  of  aug- 
menting the  output  by  the  construction  of  government  steel 
plants,  but  such  projects  never  received  serious  official  con- 
sideration. Each  large  governmental  purchaser  dealt  independ- 
ently and  competitively  with  the  industry  on  the  best  terms  it 
could  obtain,  and  for  six  months  the  market  simply  ran  wild. 
There  was  not  the  usual  economic  brake  on  prices.  Usually, 
when  steel  prices  rise  abnormally,  the  market  stops  buying, 
and  the  reduced  demand  brings  down  the  prices.  The  official 
buyers  in  1917,  however,  could  not  hold  off  for  lower  prices. 
They  had  to  have  all  the  steel  at  any  cost.  The  quotations  re- 
flected their  desperation.  The  President  issued  to  the  steel 
industry  the  solemn  warning  that  "those  who  do  not  respond 
[to  the  Government's  plea  for  lower  prices]  in  the  spirit  of 
those  who  have  gone  to  give  their  lives  for  us  on  bloody  fields 
far  away,  may  safely  be  left  to  be  dealt  with  by  opinion  and 
the  law;  for  the  law  must,  of  course,  command  these  things." 

The  great  steel  contention  came  sharply  to  public  attention 
when  a  controversy  arose  between  the  chairman  of  the  Ship- 
ping Board  and  the  manager  of  the  Emergency  Fleet  Corpora- 
tion. The  manager  had  agreed  provisionally  to  pay  $3.75  a 
hundred  pounds  for  structural  shapes  of  steel  and  $4.25  a  hun- 
dred for  ship  plates.  The  chairman  of  the  Shipping  Board  pro- 
tested that  these  prices  amounted  to  $30  a  ton  more  than 
the  Navy  was  paying  for  the  same  materials,  and  he  refused 
to  sign  the  contract.  The  public  was  aroused  by  the  discrep- 
ancy in  prices  charged  to  the  Government,  and  a  storm  im- 
pended. The  steel  makers,  seeing  on  the  horizon  the  menacing 
cloud  of  government  control,  if  not  of  outright  seizure,  has- 
tened to  cut  the  price  of  ship  plates  to  $2.50  a  hundred  pounds. 


Photo  by  Harris  6?  Eving 

COLONEL  PALMER  E.  PIERCE 

War  Department  Representative  on  War  Industries  Board 


COMMODITY  SECTIONS— STEEL  109 

The  Federal  Trade  Commission  instituted  an  enquiry  into  the 
costs  of  producing  steel.  The  industry  was  demoralized,  prices 
dropping  and  uncertainty  prevailing;  and  after  a  few  weeks 
of  this  confusion  the  magnates,  who  only  a  little  while  before 
had  been  condemning  the  paternalistic  attitude  of  the  War 
Government,  now  began  to  wonder  if  perhaps  federal  control 
would  not  be  the  best  thing  for  all  concerned.  By  late  Septem- 
ber, 1917,  they  were  anxious  to  discuss  regulation.  To  reach 
this  frame  of  mind  they  had  been  assisted  by  the  earnest  efforts 
of  Mr.  Leonard  Replogle,  who  had  been  summoned  to  Wash- 
ington to  become  chief  of  the  Steel  Division  of  the  War  Indus- 
tries Board,  and  also  by  Messrs.  Summers  and  Legge,  of  the 
Board. 

But  with  both  sides  ready  to  talk  business  it  was  one  thing 
to  contemplate  government  control  and  another  to  work  out 
a  practicable  plan  and  apply  it.  There  were  no  precedents  at 
this  time.  The  War  Industries  Board  had  to  feel  its  way.  The 
great  danger  was  adoption  of  an  unwise  policy  which  might 
depress  production.  Then,  too,  the  consequences  of  control 
stretched  away  beyond  human  foresight.  If  the  price  lid  were 
to  be  clamped  down  on  top,  then  the  Government  would  also 
have  to  control  the  basic  costs  of  fuel,  labor,  and  transporta- 
tion, lest  they  rise  and  crush  the  industry  against  the  prices 
fixed  for  its  products.  And  there  were  many  other  questions  to 
be  considered.  Should  the  contemplated  fixed  prices  apply  only 
to  government  purchases,  or  to  all  alike — Allies  and  civilian 
buyers'?  Flat  prices,  or  prices  made  up  of  cost  of  production 
plus  a  fixed  profit1?  By  this  time  the  government  agencies  had 
contracted  for  steel  to  the  value  of  hundreds  of  millions,  and 
the  greater  part  of  this  steel  had  not  yet  been  delivered  or 
even  produced.  Should  the  fixed  prices  be  retroactive  and 
include  deliveries  on  these  contracts?  In  its  ramifications  it 
was  a  tremendous  problem. 

Mr.  Replogle  was  convinced  that  these  questions  could  best 
be  settled  in  conference  with  the  steel  industry  itself.  The  War 
Industries  Board  held  a  meeting  of  its  Steel  Committee  and 
adopted  a  tentative  policy  toward  steel.  Then  the  Board 


no  THE  GIANT  HAND 

invited  the  directors  and  managers  of  the  industry  to  come  to 
Washington,  and  on  September  21,  1917,  sixty-five  of  the 
leading  steel  producers  of  the  country  met  with  the  prospective 
controllers  of  steel  in  the  War  Industries  Board. 

American  industry  never  participated  in  a  more  momentous 
conference.  The  visitors  represented  a  property  worth  more 
than  a  billion  dollars.  On  steel  rested  America's  industrial 
wealth  and  greatness — it  was  the  aristocrat  among  industries, 
and  these  sixty-five  delegates  were  its  ambassadors  plenipo- 
tentiary in  a  situation  profoundly  affecting  its  independent 
existence.  Think  not,  however,  that  because  of  the  gravity 
of  the  issues  the  convention  was  one  of  impassioned  oratory 
and  historic  utterance.  Those  who  guide  the  destinies  of  great 
business  undertakings  in  America  are  not  fond  of  extended 
debate.  They  are  commonly  what  they  are  because  of  their 
quickness  in  judgment  and  decision,  and  they  approach  and 
settle  great  problems  with  the  professional  casualness  which  is 
a  mark  of  caste.  So  it  was  in  this  historic  steel  conference — an 
almost  informal  gathering  of  suave  and  cordial  gentlemen  dis- 
cussing the  most  important  change  ever  proposed  for  the  steel 
industry  with  no  more  excitement  than  if  it  had  been  an  inter- 
esting golf  match  which  they  had  witnessed. 

The  steel  people  did  not  need  to  be  convinced  of  the  neces- 
sity for  government  control.  They  listened  to  the  statement  of 
government  policy  and  of  the  tentative  plan  of  control,  and 
decided  briefly  that  it  was  a  practicable  plan  and  that  the 
prospective  controllers  were  not  new,  inimical  potentates  lust- 
ing to  exert  their  power  regardless  of  consequences,  but  men 
who  knew  their  business.  They  went  into  executive  session 
among  themselves  for  a  few  hours,  appointed  special  com- 
mittees to  deal  separately  with  ore,  coke,  and  pig  iron,  drifted 
out  of  Washington — and  the  whole  affair  was  settled. 

The  fixed  prices  made  effective  until  the  first  of  the  year 
1918  ranged  from  $2.90  a  hundred  pounds  for  bars  to  $3.25 
for  plates;  and  with  these  prices  went  the  agreement  that  there 
should  be  no  reduction  in  the  wage  scales,  that  the  prices  were 
for  all  alike,  and  that  the  steel  group  would  endeavor  to  the 


COMMODITY  SECTIONS— STEEL  in 

utmost  to  keep  production  up  to  the  maximum  so  long  as  the 
war  should  last.  Furthermore,  the  industry  agreed  to  distribute 
its  products  according  to  the  priority  orders  of  the  War 
Industries  Board. 

Steel  was  so  important  that  its  control  was  administered, 
not  by  a  commodity  section,  but  by  the  Steel  Division,  a  major 
branch  of  the  War  Industries  Board.  The  American  Iron  and 
Steel  Institute  served  as  the  accredited  war-service  committee 
for  the  steel  industry  in  its  contact  with  the  Board.  The  Insti- 
tute formed  numerous  subcommittees  to  cooperate  with  the 
Board  in  its  subsequent  activities  in  fixing  prices,  in  devising 
means  of  control  and  methods  of  distribution,  in  settling  ques- 
tions of  priority,  and  so  on.  The  Board  primarily  fixed  prices 
for  only  the  basic  steel  products.  The  prices  for  other  standard 
steel  products,  known  as  differentials — a  long  list  of  them — the 
industry  itself  later  determined,  subject  to  the  approval  of  Mr. 
Replogle  and  the  Steel  Division.  This  Division  was  an  amalga- 
mation and  development  of  the  old  Iron  and  Steel  Committees 
of  the  Council  of  National  Defense.  The  differential  prices 
could  be  determined  almost  automatically  after  the  basic  prices 
were  fixed.  The  differentials  were  reviewed  by  the  Steel  Divi- 
sion, which  did  not  hesitate  to  revise  prices  which  it  could  not 
justify.  Thus  in  no  sense,  not  even  for  the  most  obscure  steel 
products,  did  the  industry  fix  its  own  prices. 

The  pioneer  work  of  the  War  Industries  Board  in  assuming 
control  of  the  steel  industry  was  of  immense  value  to  the  Gov- 
ernment later  on  when,  through  its  Price  Fixing  Committee, 
it  undertook  to  dictate  prices  to  almost  the  whole  of  industry. 
When  the  Price  Fixing  Committee  was  created  it  found  fixed 
iron  and  steel  prices  already  in  existence.  The  Committee, 
while  perhaps  technically  independent  of  the  War  Industries 
Board,  nevertheless  found  largely  in  this  early  experience  the 
guiding  principles  for  its  work. 

The  control  of  steel  did  not  end  with  the  fixing  of  its  prices. 
There  were  still  great  problems  of  administration.  There  was 
the  question  of  what  buyers  should  be  permitted  to  have  access 
to  steel.  This  question  came  within  the  province  of  the  priori- 


112  THE  GIANT  HAND 

ties  organization.  There  was  not  enough  steel  for  all  the 
favored  buyers.  Therefore  rationing  was  necessary.  It  was 
policy  to  allow  numerous  kinds  of  manufacture  to  continue 
solely  for  civilian  consumption,  though  with  a  reduced  out- 
put; and  the  War  Industries  Board  approached  few  questions 
more  delicate  than  determining  the  curtailments  of  steel  sup- 
plies to  such  industries. 

The  questions  were  finally  all  settled  in  a  long  series  of  con- 
ferences with  the  affected  industries.  Most  of  the  manufac- 
turers were  represented  in  the  conferences  by  war-service  com- 
mittees, but  they  often  attended  as  individuals.  Judge  Parker, 
the  priorities  commissioner,  or  his  assistant,  Mr.  Rhodes  S. 
Baker,  presided  at  the  conferences,  to  which  came  the  chairman 
of  the  Conservation  Division,  the  chief  of  the  Labor  Section, 
and  the  chiefs  of  the  interested  commodity  sections.  When- 
ever such  a  conference  reached  a  decision  (which,  it  may  be 
noted,  was  seldom  to  the  entire  satisfaction  of  the  rationed 
industry),  it  referred  its  report  for  ratification  to  the  Industrial 
Adjustment  Committee  of  the  Priorities  Board,  which  in- 
cluded in  its  membership  representatives  of  all  the  principal 
war  organizations  of  the  Government.  Once  ratified,  the  ration- 
ing of  the  steel  was  administered,  not  by  the  Steel  Division, 
but  by  the  commodity  section  in  control  of  the  industry 
affected  by  the  rationing  order. 

The  curtailment  of  steel  to  the  nonwar  industries  affected 
the  public  in  that  it  cut  down  the  normal  supplies  of  many 
commonly  used  articles.  The  more  important  of  these  were  as 
follows : 

Automobiles  Metal  beds 

Pianos  Boilers 

Cutlery  Radiators 

Coal  stoves  Baby  carriages 

Metal  ware  Gas  stoves 

Refrigerators  Tin  plates 

Clothes  wringers  Phonographs 

Corsets  Agricultural  implements 


Photo  by  Harris  &  Ewing 

J.  LEONARD  REPLOGLE 


COMMODITY  SECTIONS— STEEL  113 

Farm  tractors  Pottery 

Bicycles  Padlocks 

Electric  heating  apparatus  Builders'  hardware 

Oil  stoves  Scales  and  balances 

Watches  Sporting  arms 

Sewing  machines  Cash  registers 

Metal  stamps  Rat  and  other  animal  traps 

Electric  fans  Ice  cream  freezers 

Safes  and  vaults  Vacuum  cleaners 

Lawn  mowers  Road-making  machinery 

The  control  of  iron  and  steel  was  the  most  radical  and  impor- 
tant step  hitherto  taken  by  the  War  Industries  Board.  It  was 
the  precursor  of  the  control  of  all  American  industry.  The  con- 
trol of  steel  gave  the  Government  a  powerful  lever,  if  it  had 
ever  needed  one,  with  which  to  move  other  industries  into 
subjugation;  for,  in  addition  to  fuel  and  transportation,  the 
War  Industries  Board  was  in  a  position  to  withhold  steel  from 
an  obdurate  manufacturer,  if  it  chose.  Finally,  the  attitude  of 
the  steel  industry  in  acceding  willingly  to  federal  control  was 
an  example  and  an  inspiration  to  other  producers.  Doubtless, 
mistakes  were  made.  Perhaps  fixed  prices  at  times  worked 
injustices  on  both  sides  of  the  ledger.  But  the  great  central 
purpose  was  accomplished,  and  there  can  be  no  questioning  the 
wisdom  or  effectiveness  of  the  policy  adopted. 


CHAPTER  VIII 
NITRATES— GLASS— DYES— CHEMICALS 

THE  war  brought  us  to  a  sharp  realization  that  the 
American  character  is  prone  to  an  easy-going  neglect  of 
the  future,  so  long  as  the  present  seems  to  be  well  cared 
for.  This  realization  was  brought  home  to  us  when  we  awoke  to 
the  fact  that  we  had  no  artificial  dye  industry.  It  was  brought 
home  even  more  poignantly  when  we  discovered  that  our  forces 
would  be  without  telescopes,  field  glasses,  gun  sights,  and 
cameras,  unless  we  learned  how  to  make  optical  glass.  It  was 
again  brought  sharply  home  to  us  when  we  found  out  that 
wealth  could  not  take  the  place  of  experience  in  the  produc- 
tion of  aircraft.  But  the  most  painful  awakening  of  all  was  to 
the  fact  that  America,  the  leading  industrial  nation  of  the 
world,  not  only  had  no  nitrogen-fixation  plants  in  which  the 
essential  element  could  be  extracted  from  the  boundless  supply 
of  air,  but  that  it  could  not,  during  the  period  of  the  war,  build 
enough  nitrate  plants  of  sufficient  size  to  make  us  independent 
of  the  natural  nitrate  deposits  of  Chile. 

Practically  every  explosive  requires  nitrogen,  either  in  its 
actual  composition  or  in  the  manufacturing  processes  which 
produce  it.  Without  nitrates,  and  plenty  of  them,  we  could 
have  no  powder  industry.  Mighty  guns,  large  armies,  and  tre- 
mendous shell  production  would  alike  be  futile  in  war  without 
nitrates,  and  nitrates  in  quantity.  Had  Germany  not  possessed 
adequate  nitrogen-fixation  plants  within  her  own  borders,  she 
would  never  have  dared  to  start  the  war;  for,  outside  the  me- 
chanical fixation  processes  and  the  production  from  by-product 
coke  ovens,  the  only  available  supply  of  nitrogen  on  earth 
exists  in  the  saltpeter  beds  on  the  rainless  desert  of  northern 
Chile. 


NITRATES— GLASS— DYES— CHEMICALS     1 1 5 

The  Allies,  too,  had  been  backward  in  developing  artificial 
fixation ;  and  throughout  the  war  the  only  great  supply  market 
was  Chile.  Normally,  we  import  something  less  than  a  million 
tons  of  Chilean  nitrate  a  year, — in  1913  the  figure  was  625,000 
tons, — of  which  more  than  sixty  per  cent  is  used  in  fertilizers 
rather  than  in  industrial  processes.  By  1916  we  were  importing 
a  million  and  a  quarter  tons  and  using  the  larger  part  of  the 
imports  in  the  manufacture  of  explosives,  principally  to  satisfy 
the  orders  of  European  nations  buying  from  us.  At  the  same 
time  the  Allies  were  buying  nitrates  in  Chile  for  their  own 
powder  mills.  One  result  was  that  the  price  of  natural  sodium 
nitrate  was  forced  up  and  up. 

Conditions  in  Chile  fostered  the  rise  in  price.  The  market 
there  was  narrow,  centralized  in  a  few  hands.  The  buying  was 
large  and  highly  competitive.  The  Chileans  took  full  advan- 
tage of  the  demand  for  their  greatest  natural  resource,  until  it 
became  evident  that,  unless  something  were  done  about  it, 
Chile  was  going  to  absorb  a  tremendous  and  undue  amount  of 
wealth  at  the  expense  of  most  of  the  warring  nations  of  the 
world. 

Early  in  1917  the  War  Industries  Board  began  making 
plans  to  end  this  situation.  It  promulgated  an  announcement 
(by  many  criticized  at  the  time  as  ill-advised  and  premature) 
that  munitions  manufacturers  making  war  contracts  with  the 
United  States  need  no  longer  cover  with  options  their  prospec- 
tive commitments  for  nitrates  to  meet  their  contract  obliga- 
tions, since  the  Government  itself  would  guarantee  the  supply 
at  four  and  a  half  cents  a  pound.  To-day  it  may  be  stated 
frankly  that  when  the  Board  made  this  announcement  it  had 
no  definite  idea  of  how  it  was  going  to  make  its  guarantee 
good.  Yet  the  market  was  nervous  and  in  need  of  a  sedative, 
and  the  nitrate  guarantee  was  the  bromide  selected. 

There  is  no  substitute  for  nitrogen  in  powder  making.  It  is 
nitrogen  or  no  powder.  To  build  fixation  plants  and  develop 
processes  it  takes  months  and  years.  Bleached  cotton  linters, 
nitrated  in  a  bath  of  nitric  and  sulphuric  acids,  produce  nitro- 
cellulose (smokeless)  powder.  Toluol  is  nitrated  to  produce 


ii6  THE  GIANT  HAND 

trinitrotoluol  (T.  N.  T.).  Phenol  is  nitrated  to  produce  picric 
acid,  another  important  war  explosive.  There  is  no  substitute 
for  nitrogen  in  any  of  these  processes.  If  one  lacks  enough 
spruce,  one  can  use  oak  or  pine  or  aluminum.  When  Germany 
lacked  rubber  for  tires  she  used  rope,  and  her  truck  wheels 
turned.  If  there  is  not  enough  copper  to  make  brass,  industry 
can  get  along  without  brass  for  most  purposes.  The  latest 
German  submarines  had  absolutely  no  brass  in  them,  except  in 
their  bearings.  But  if  a  nation  lacks  nitrates,  it  does  not  make 
any  high  explosives,  and  without  high  explosives  it  is  help- 
less in  a  modern  war. 

Shortly  after  the  War  Industries  Board  guaranteed  the  price 
of  nitrates  and  faced  a  heavy  governmental  loss  in  supplying 
the  commodity  at  the  guaranteed  price,  a  most  unexpected  and 
dramatic  occurrence  came  to  its  rescue.  The  Navy  Intelligence 
Service  picked  up  an  enemy  cable  dispatch  which,  being  de- 
coded, divulged  that  the  gold  reserve  of  the  Republic  of  Chile 
was  held  on  deposit  in  Berlin.  Chile,  facing  the  depreciation  of 
her  paper  currency  as  a  consequence,  which  in  turn  might  dis- 
count her  advantage  in  holding  the  nitrate  monopoly,  was 
making  a  strong  effort  to  secure  her  gold.  Germany  probably 
would  have  been  unable  to  send  the  gold  to  Chile,  even  if  she 
had  been  willing  to  do  so;  but  she  was  not  willing  and  even 
declined  to  enter  into  negotiations  with  the  Chilean  Ambas- 
sador in  Berlin. 

This  fact  was  most  important  to  us.  The  War  Industries 
Board  at  once  entered  into  negotiations  with  the  President  of 
Chile.  Out  of  the  conferences  came  an  agreement  that  the 
United  States  would  restore  Chile's  gold  reserve  to  her,  deliv- 
ering the  gold  in  Chile.  In  return  Chile  agreed  to  confiscate 
the  German-owned  nitrate  in  Chile  and  sell  it  to  the  United 
States.  The  chief  advantage  to  us  was  the  immense  price  con- 
cession. England  was  then  paying  seventeen  shillings  for  the 
Chilean  standard  unit  selling  quantity  of  sodium  nitrate,  and 
facing  the  prospect  of  twenty-five  shillings  in  the  near  future. 
Under  the  agreement  we  secured  the  same  quantity  for  ten 
shillings  and  sixpence. 


Photo  by  Signal  Corps 


FINISHING    PROCESS  IN  MANUFACTURE 
OF  BIG  GUNS 


Photo  from   Ordnance  Department 

LIQUID  AIR  DEPARTMENT,  U.  S.  NITRATES  PLANT  NO.  2 


NITRATES— GLASS— DYES— CHEMICALS     1 17 

This  agreement  brought  us  235,000  tons  of  nitrate.  Not  all 
of  it  went  to  the  United  States,  because  we  agreed  to  apportion 
some  of  it  among  the  Allies,  provided  that  they  would  keep 
out  of  the  Chilean  market  pending  our  further  negotiations  for 
nitrates. 

It  would  be  difficult  to  overestimate  the  importance  of  this 
incident.  It  not  only  gave  us  the  sorely  needed  nitrate,  but  it 
stabilized  the  market  and  reduced  the  price;  and  finally  it  led 
to  the  formation  of  the  first  of  the  international  executives,  im- 
portant agencies  in  international  war  industry  about  which 
something  is  to  be  said  later  on.  The  International  Executive 
in  Nitrates  was  a  pool  of  the  interests  of  the  nitrate  buyers — 
the  Allies  and  America.  Fathered  by  the  War  Industries  Board, 
and  actively  pushed  both  by  its  chairman  and  by  Mr.  Charles 
D.  McDowell,  then  chief  of  the  Nitrate  Section  and  later 
director  of  the  Chemicals  Division  of  the  War  Industries 
Board,  the  plans  for  pooled  buying  were  initiated  in  October, 
1917,  when  prices  were  at  their  peak;  and  by  January,  1918, 
the  mechanism  of  the  pool  was  in  running  order.  The  Interna- 
tional Nitrate  Executive  was  installed  in  London,  headed  by 
Mr.  Herbert  Gibbs,  of  the  firm  of  Antony  Gibbs  &  Sons. 
Mr.  Robert  P.  Skinner,  the  United  States  consul  general  at 
London,  was  the  American  representative  with  the  Executive. 
It  was  the  first  plan  to  have  the  Executive  itself  do  the  united 
buying  in  Chile,  afterward  reselling  the  commodity  to  the  con- 
tracting countries;  but  such  a  plan  took  the  regular  buyers  out 
of  the  market  and  bereft  them  of  their  business.  This  was  a 
thing  to  be  avoided.  Accordingly  the  Board  arranged  for  the 
regular  American  buyers  to  continue  in  business,  but  to  buy 
only  a  fixed  percentage  of  the  total  quantity  allotted  to  the 
United  States  by  the  international  pool,  and  at  the  pooled 
price.  Four  large  nitrate  importers  were  the  sole  purchasing 
agents  for  the  United  States. 

Headquarters  for  the  Nitrate  Committee  of  the  War  Indus- 
tries Board  were  established  in  New  York  with  Mr.  H.  Ray 
Paige  as  manager.  The  other  members  of  the  committee  were 
two  representatives  from  each  of  the  four  buying  concerns. 


n8  THE  GIANT  HAND 

The  Nitrate  Committee  bought  its  allotment  of  nitrates  and 
shipped  it  to  the  United  States,  where  it  was  delivered  accord- 
ing to  allocations  made  by  the  War  Industries  Board  at  prices 
fixed  by  the  Board.  The  Government  itself  bought  at  cost,  plus 
the  expenses  of  delivery.  Other  consumers,  when  they  could 
get  any  nitrates  at  all,  paid  the  cost,  plus  a  two  and  a  half  per 
cent  commission  or  profit.  The  Shipping  Board  supplied  the 
tonnage  which  freighted  the  commodity  from  Chile. 

It  was  the  object  of  the  War  Industries  Board  here,  as  every- 
where in  its  mighty  control  of  American  industry,  to  preserve 
peace  industries  and  starve  as  little  as  possible  the  nonwar 
businesses.  But  when  there  was  not  enough  nitrate  for  both 
peace  and  war,  peace  had  to  suffer  first.  One  of  the  early  acts 
of  the  War  Industries  Board  was  to  arrange  with  the  DuPont 
Company  to  supply  109,000  long  tons  of  nitrate  to  the  De- 
partment of  Agriculture,  which  expected  to  distribute  it  to 
farmers  in  the  spring  of  1918  as  fertilizer.  But  the  company 
was  able  to  deliver  only  a  little  more  than  half  of  this  quan- 
tity. The  shortage  of  ships,  losses  of  nitrate  cargoes  at  sea,  and 
the  fact  that  the  American  powder  factories  had  less  than  a  six 
weeks'  supply  of  nitrate  on  hand  in  the  spring  of  1918,  cur- 
tailed the  supply  of  the  commodity  to  the  farms  in  order  to 
feed  the  munitions  plants. 

Little  coal  in  Chile,  less  oil  there,  no  bags  for  sacking  the 
nitrates,  and  a  run-down  and  depreciated  railroad  equipment 
in  the  nitrate  fields  afflicted  the  supply.  Chile  does  not  produce 
any  of  these  accessories  to  nitrate  production,  yet  she  can  pro- 
duce no  nitrate  without  bags  in  which  to  pack  it  or  cars  and 
rails  on  which  to  haul  it.  Accordingly  when  the  Chilean  Gov- 
ernment offered  Uncle  Sam  680,000  gross  tons  of  nitrate  in 
return  for  supplies,  Uncle  Sam  snatched  at  the  chance,  even 
though  it  meant  the  employment  of  sorely  needed  ships  and 
the  overloading  of  an  already  congested  steel  market.  We  had 
to  have  the  nitrate. 

The  War  Industries  Board  justly  regarded  its  handling  of 
the  nitrate  situation  as  a  good  job  well  done.  It  was  a  compli- 
cated job,  including  many  diverse  elements.  As  a  participant 


NITRATES— GLASS— DYES— CHEMICALS     1 1 9 

in  the  pool,  we  had  to  deal  with  European  nations  on  the  one 
hand;  and  as  a  direct  buyer,  we  had  to  deal  with  Chile.  We 
had  to  keep  American  industry  supplied  at  a  carefully  con- 
trolled price,  while  still  allowing  American  importers  to  retain 
their  buying  and  shipping  organizations,  that  they  might  not 
have  to  rebuild  their  trade  associations  after  the  war.  Our 
arrangement  meant  keeping  the  London  Executive  informed 
as  to  the  condition  of  our  nitrate  stocks,  requirements,  ship- 
ments, and  consumption.  It  implied  a  close  liaison  with  the 
Shipping  Board  and  with  the  Shipping  Control  Committee  for 
the  adequate  allocation  of  tonnage  to  the  importers.  It  meant 
seeing  to  it  that  Army  did  not  starve  Navy  or  Navy  play  hog 
with  Army;  looking  out  for  every  nitric  acid  and  powder  plant 
to  see  that  it  was  never  short;  trying  to  help  the  farmer;  and 
carrying  information  to  and  getting  assistance  from  the  priori- 
ties organization  in  the  work  of  obtaining  railroad  supplies, 
bags,  oil,  and  other  materials  for  the  nitrate  fields.  Altogether, 
it  was  a  complicated  work.  But  it  was  done ;  and  the  most  suc- 
cessful phase  of  the  munitions  program  in  America,  the  pro- 
duction of  powder  and  high  explosives,  owed  its  amazing 
success  to  these  fundamental  activities. 

It  is  quite  a  mental  jump  from  a  nitrate  bed  in  Chile  to  a 
glass  crucible  in  Pittsburg.  Such  jumps  the  War  Industries 
Board  had  to  make  daily  and  hourly.  While  war  materials  can 
not  justly  be  graded  in  importance,  something  after  all  is  to  be 
said  for  the  surpassing  importance  of  optical  glass.  One  can, 
indeed,  fire  a  big  gun  without  looking  through  a  telescope,  but 
one  can  not  make  it  hit  a  target.  The  importance,  to  the  Army 
and  the  Navy,  of  enough  lenses  to  make  all  the  needed  tele- 
scopic sights,  range  finders,  sextants,  telescopes,  field  glasses, 
and  cameras  is  not  to  be  measured  by  the  $50,000,000  we  spent 
for  optical  instruments  during  the  war.  These  instruments  and 
others  were  the  eyes  of  the  land  and  sea  forces — and  you  don't 
value  eyesight  in  money. 

To  the  average  person,  glass  may  be  just  glass  and  nothing 
more,  but  to  the  expert  in  optics  one  sort  of  glass  is  no  more 
like  another  than  oak  is  like  pine.  Optical  glass  differs  from 


120  THE  GIANT  HAND 

window  glass  as  radically  as  steel  for  a  razor  blade  differs  from 
iron  for  a  frying  pan.  Optical  glass  is  glass  which,  by  reason 
of  various  admixtures  of  chemicals  in  its  composition,  is  pro- 
duced in  different  densities  and  therefore  possesses  different 
refractive  powers.  Some  densities  are  able  to  bend  or  refract 
light  rays  more  than  others.  Upon  the  accuracy  and  efficiency 
of  lenses  depend  the  performance  of  a  submarine,  the  per- 
centage of  hits  scored  by  a  fighting  ship,  and  the  accuracy  of  a 
map  made  by  an  airman  with  a  camera. 

We  had  practically  no  optical  glass  of  our  own.  We  had 
bought  our  supply  in  Germany  and  Austria,  home  of  the 
world's  optical  industry.  (The  birthplace  of  optical  glass  was 
Jena.)  The  war  cut  off  our  imports  in  1914;  our  entry  as  a 
belligerent  in  1917  instantly  multiplied  our  demand  beyond 
anything  ever  known ;  and  then  the  country  was  treated  to  the 
spectacle  of  the  Government  appealing  to  the  amateur  photog- 
raphers of  the  country  to  sell  their  camera  lenses  to  the  Signal 
Corps,  and  of  the  Navy  Department  begging  all  and  sundry 
who  had  telescopes,  field  glasses,  and  prism  binoculars,  to  lend 
them  to  the  Navy.  The  amateurs  did  so.  They  responded  nobly, 
and  children  brought  their  toy  instruments,  even  as  grand- 
father brought  his  old  and  battered  spyglass.  These  contribu- 
tions helped  a  great  deal.  But  to  whom  was  the  Government 
to  appeal  for  range  finders,  submarine  periscopes,  prisms,  and 
lenses  of  larger  and  different  caliber?  To  none  other  than  the 
War  Industries  Board. 

There  was  nothing  in  the  making  of  optical  glass  which  we 
could  not  understand  or  accomplish,  even  though  our  commer- 
cial glass  makers  knew  practically  nothing  of  the  formula  for 
optical  glass.  All  we  had  to  do  was  discover  these  formulae, 
train  glass  makers  and  glass  workers  in  the  art,  and  go  to  work. 
But  someone  had  to  direct  the  enterprise,  and  that  someone 
was  the  War  Industries  Board.  As  the  result  of  the  effort, 
America  developed  an  optical  glass  industry  and  an  optical 
instrument  industry  much  larger  than  the  normal  consumption 
of  the  country  could  possibly  maintain. 

While  numerous  agencies  of  the  Government  participated 


Photo  from   Arma  Engineering    Company,   Inc. 

TWENTY-FOUR-IXCH  SEARCHLIGHTS 


Photo  from  Babcock  &   Wilcox 

BOILERS  FOR  DESTROYERS 


Photo  from  Quartermaster  Department 


MAKING  OVERSEAS  CAPS 


Photo  from  Quartermaster  Department 


WING  OF  A  WAR  FACTORY 


NITRATES— GLASS— DYES— CHEMICALS     1 2 1 

in  the  extraordinary  campaign  to  build  up  the  optical  glass 
industry  in  America,  the  War  Industries  Board  took  direction 
of  it.  The  Board  proceeded  to  establish  a  school  for  optical 
glass  workers  at  Rochester  as  part  of  the  Mechanics  Institute. 
The  Geophysical  Laboratory  of  the  Carnegie  Institution  sent 
part  of  its  staff  to  the  plant  of  Bausch  &  Lomb,  the  great  opti- 
cal manufacturing  firm  in  Rochester,  in  which  city  the  glass 
problem  was  largely  solved.  The  pot  in  which  optical  glass 
could  be  melted — a  hard  problem,  this — was  developed  by  the 
Bureau  of  Standards.  The  Pittsburg  Plate  Glass  Company  be- 
came, under  government  supervision,  the  largest  producer  of 
optical  glass.  The  Spencer  Lens  Company,  of  Buffalo,  erected 
a  new  plant  to  care  for  the  government  contracts;  and  in  this 
plant,  through  the  efforts  of  Dr.  Morey  of  the  Geophysical 
Laboratory,  was  discovered  a  process  which  almost  cut  in  two 
the  time  required  for  making  certain  glasses.  The  Mt.  Wilson 
Observatory  in  California,  with  aid  from  the  Ordnance  De- 
partment, began  to  grind  precision  lenses.  Keuffel  &  Esser, 
makers  of  fine  instruments,  built  a  special  plant  at  Hoboken. 
The  man  under  whom  most  of  this  was  done  was  George  E. 
Chatillon,  Chief  of  the  Optical  Glass  Section.  In  behalf  of  the 
War  Industries  Board  he  took  over  bodily  the  entire  glass 
industry  in  this  country,  and  thereafter  no  orders  were  to  be 
accepted  without  the  Board's  approval.  Labor  was  prevented 
from  shifting.  Prices  were  controlled  by  purchasers,  instead  of 
sellers,  and  also  by  a  miniature  priorities  system  of  the  Section's 
own,  whereby  permits  had  to  be  taken  out  before  glass  could 
be  secured.  The  Section  controlled  the  distribution  of  the  new 
product  to  the  favored  manufacturers,  the  latter  being,  of 
course,  all  who  could  aid  in  the  production  of  lenses  and 
instruments.  Raw  materials,  including  the  needed  steel  and 
brass,  received  their  priority  ratings  after  review  by  this  Sec- 
tion. The  War  Trade  Board  took  the  advice  of  the  Section  in 
granting  export  and  import  licenses  for  materials  which  the 
new  industry  needed.  It  seemed  almost  as  if  the  whole  gov- 
ernmental machinery  were  concerned,  in  one  way  or  another, 
with  the  production  of  optical  glass  and  optical  instruments; 


122  THE  GIANT  HAND 

yet  outside  of  those  who  were  working  at  the  subject,  few 
persons  in  Washington,  and  fewer  in  the  country,  knew  what 
was  happening.  After  all,  the  total  amount  of  optical  glass 
made  was  not  great  in  bulk  or  weight,  but  it  was  mighty  impor- 
tant in  the  whole  war  plan. 

The  manufacture  of  optical  glass  in  the  United  States  was 
an  invasion  of  an  old  German  monopoly.  Another  invasion  of 
another  former  German  monopoly  was  our  development  of  an 
artificial  dye  industry.  Dyes  were  of  exceeding  importance  in 
the  war  program.  Not  that  the  civilian  population  had  to  have 
fine  colors  for  its  clothing,  for  it  did  not;  but  there  were  many 
other  reasons  for  the  encouragement  given  to  the  domestic  dye 
industry.  The  manufacture  of  synthetic  dyes  is  closely  related 
to  the  manufacture  of  all  sorts  of  explosives,  and  moreover 
the  dyes  themselves  are  absolutely  essential  to  the  production 
of  certain  indispensable  war  supplies,  as,  for  instance,  olive- 
drab  cloth,  certain  medicines  produced  from  dye  chemicals, 
and  stains  used  in  photographic  processes. 

When  coal  tar  is  fractionally  distilled,  a  great  many  differ- 
ent products  result.  Some  of  these  derivatives  are  known  to 
the  trade  as  "intermediates."  Certain  intermediates  are  essen- 
tial to  the  manufacture  of  both  synthetic  dyes  and  explosives. 
Before  1914  we  imported  sufficient  dyes  to  supply  our  market, 
and  also  most  of  the  intermediates  used  in  our  powder  indus- 
try. Cutting  off  the  influx  of  dyes  meant  cutting  off  the  influx 
of  intermediates,  and  intermediates  we  had  to  have.  And  so  we 
made  them. 

We  began  with  the  knowledge  that,  except  nitrates,  we  had 
in  this  country  every  raw  material  needed  for  making  any  and 
all  explosives.  The  thing  was  to  learn  how  to  use  the  raw  mate- 
rials. We  did  not  know  much  about  making  dyes  or  interme- 
diates. Once  before,  when  we  had  tried  to  start  a  dye  industry, 
Germany  had  flooded  our  markets  with  dyes  so  inexpensive 
that  our  budding  infant  starved  to  death  for  lack  of  custom. 
Dye-making  was  a  national  asset  to  Germany.  Who  can  tell 
how  many  of  the  jealously  guarded  secrets  of  that  industry 
were  held  also  to  be  war  secrets,  or  how  much  of  Germany's 


NITRATES— GLASS— DYES— CHEMICALS     1 23 

objection  to  our  making  dyes  was  commercial  and  how  much 
military  and  strategic? 

In  1914  our  dye  trade  with  Germany  broke  off.  By  1915  we 
were  paying  for  dyes  1,500  per  cent  more  than  in  1913.  Part  of 
this  increase  was  due  to  the  shortage  in  dyes,  part  to  specula- 
tion in  the  dye  market,  and  part  to  the  fact  that  a  dye  is  so 
small  an  item  of  expense  in  textiles  that  a  mill  will  pay  almost 
any  price  for  it  rather  than  shut  down.  At  this  point  our 
people  began  to  find  out  what  they  could  do  for  themselves, 
and  they  made  progress.  In  1914  American  industry  produced 
scarcely  any  dyes  at  all.  Three  years  later,  118  American  dye 
manufacturers  received,  in  twelve  months,  $104,000,000  for 
287,000,000  pounds  of  134  different  kinds  of  products. 

From  bituminous  coal  we  get  coke,  ammonia,  gas,  and  coal 
tar.  From  coal  tar  are  distilled  about  150  different  chemicals. 
Among  these  are  certain  substances  called  "crudes,"  which, 
redistilled,  give  up  intermediates ;  and  among  these  are  refined 
toluol  and  phenol,  both  of  which  are  widely  used  in  making 
high  explosives.  One  of  the  reasons  why  we  had  always  been 
backward  in  dye-making  and  the  production  of  intermediates 
was  the  existence  of  German  patents  registered  in  America. 
The  Trading  with  the  Enemy  Act  broke  that  control;  and 
this  law,  together  with  protection  in  high  duties  granted  by 
the  dyestuff  tariff  law,  attracted  American  capital  into  the  dye- 
making  field. 

The  Chemical  Division  of  the  Council  of  National  Defense 
had  taken  cognizance  of  the  dye  industry  almost  from  the  start. 
The  Artificial  Dye  and  Intermediate  Section  of  the  War  Indus- 
tries Board — Mr.  J.  F.  Schoellkopf,  Jr.,  was  chief  of  it  until 
he  entered  the  Army,  when  he  was  succeeded  by  Mr.  V.  L. 
King — continued  the  work  of  the  former  Chemical  Division 
and  eventually  extended  its  control  over  the  industry,  being 
especially  concerned  with  toluol,  phenol,  acetic  acid,  wood 
alcohol,  and  caustic  soda.  The  Section  had  to  exercise  care  in 
calculating  the  needs  of  the  growing  dye  industry,  and  in 
keeping  it  supplied  with  what  it  needed  for  the  production  of 
dyes ;  and  at  the  same  time  it  had  to  heed  the  constant  appeal 


124  THE  GIANT  HAND 

by  the  explosive  manufacturers  for  more  and  more  interme- 
diates. 

Olive-drab  cloth  became  widely  popular  during  the  war. 
Civilians  wanted  it;  women  wanted  it;  the  Boy  Scouts  and 
Girl  Scouts  wanted  it;  tent  makers  wanted  it;  everyone 
wanted  olive-drab.  Few  could  understand  why  they  could  not 
have  it.  Was  not  the  Government  making  millions  and  millions 
of  yards  of  it*?  The  reason  why  there  was  not  unlimited  olive- 
drab  cloth  was  that  the  country  was  in  a  shortage  of  sulphide 
of  soda,  used  in  making  dyes.  There  was  not  enough  to  supply 
the  whole  demand,  and  therefore  the  public  had  to  repress  its 
passion  for  olive-drab. 

The  story  of  toluol  is  not  entirely  a  war  industries  board 
story — indeed,  inasmuch  as  the  War  Industries  Board  never 
made  a  contract,  never  bought  a  dollar's  worth  of  goods,  and 
never  paid  a  dollar  for  any  product,  the  story  of  anything  with 
which  it  dealt  is  not  exclusively  its  own.  But  toluol  was  essen- 
tially and  particularly  a  military  problem,  an  ordnance  prob- 
lem. It  was  to  the  Ordnance  Department  of  the  Army  that  the 
Board  looked  for  money  with  which  to  build  new  toluol  plants, 
and  it  was  the  Ordnance  Department  which  actually  built 
them.  Through  the  War  Industries  Board,  the  Government 
took  over  the  entire  production  of  toluol  in  February,  1918, 
and  fixed  a  price  of  $1.50  a  gallon  for  it,  a  price  later  confirmed 
by  the  Price  Fixing  Committee.  The  Government  so  built  up 
and  stimulated  the  industry  that  by  the  time  of  the  armistice 
America  was  producing  25,000,000  gallons  of  toluol  yearly, 
and  the  rate  of  expansion  would  have  added  another  10,000,- 
ooo  gallons  to  this  quantity  in  1919.  The  normal  consumption 
of  toluol  in  the  United  States  is  only  slightly  in  excess  of 
1,000,000  gallons  a  year. 

The  War  Industries  Board  concerned  itself  with  most  of 
the  purely  industrial  chemicals  and  every  one  of  the  war  chemi- 
cals. Every  one  offered  its  special  problems;  but  in  each  com- 
modity section  which  dealt  with  these  chemicals  the  procedure 
was  essentially  the  same.  In  each  the  problem  was  to  find  the 
need,  to  locate  the  available  supply,  to  lay  plans  to  increase  the 


Photo  from   Wilputte   Coke   Oven   Corporation 

AN  ARMY  TOLUOL  RECOVERY  PLANT 


Photo  from  Metropolitan   Gas   Company,  Brooklyn,  N.    Y. 

DISTILLING  TOLUOL  FROM  MUNICIPAL  GAS 


NITRATES— GLASS— DYES— CHEMICALS     1 25 

supply,  to  curtail  the  use  when  the  greatest  supply  did  not 
equal  the  need,  to  allocate  to  peace  industries  enough  of  their 
materials  to  keep  them  alive,  and  to  suggest  substitutes,  or 
discover  substitutes  if  none  existed. 

In  all  the  commodity  sections  the  questionnaire  was  at  once  a 
tool,  a  weapon,  and  a  block  with  which  to  build.  The  Board 
could  not  go  to  a  hundred  chemical  manufacturers  individually 
and  ask  them  questions — at  any  rate,  not  to  a  thousand  of 
them.  But  it  could  and  did  have  hundreds  of  clerks  address 
thousands  of  printed  forms,  and  another  force  digest  and  tabu- 
late the  statistics  from  the  forms  when  they  came  back  again. 
And  when  it  had  its  statistics  and  thus  could  survey  the  indus- 
try, it  could  say  to  the  proper  war-service  committee :  "We  need 
a  hundred  million  pounds  more  than  the  United  States  has  of 
this  or  that.  How  much  capital  do  you  need?  Who  will  build 
new  plants?  How  can  you  help  get  the  trained  men?  When  can 
you  get  to  work?  What  can  we  count  on?"  And  the  war-service 
committee  would  hold  a  meeting  and  report,  and  the  com- 
modity section  would  agree  or  disagree,  and  the  matter  would 
be  fought  out  to  a  finish,  until  everyone  was  satisfied;  after 
which  the  word  would  go  forth;  and  the  industry  would  turn 
itself  upside  down  and  inside  out  and  produce  the  chemical 
needed. 

When  the  War  Industries  Board  had  dealings  with  the  Rail- 
road Administration  or  Shipping  Board,  it  was  usually  to  fur- 
ther the  ends  of  the  War  Industries  Board;  but  sometimes  it 
was  the  other  way  around,  as  when  the  Shipping  Board  and 
Railroad  Administration  came  to  the  War  Industries  Board  for 
creosote.  Creosote  is  a  wood  preservative.  There  was  not 
enough  creosote  for  the  railroads,  the  Emergency  Fleet  Cor- 
poration, the  Army,  the  Navy,  and  the  government-controlled 
telephone  and  telegraph  companies,  to  say  nothing  of  the  pri- 
vate consumers.  The  rancher  who  sets  a  fifty-mile  fence  is  as 
anxious  to  creosote  his  post  ends  as  is  the  telegraph  company 
which  sets  poles  across  a  continent,  or  a  railroad  which  lays 
ties  from  Port  Huron  to  New  Orleans. 

The  Creosote  Section  conquered  the  problem  of  stretching 


126  THE  GIANT  HAND 

out  an  insufficient  supply  over  every  essential  use  by  allocating 
creosote,  by  enforcing  the  practice  of  economy  in  its  use,  by 
importing  a  million  gallons  or  so  from  Japan,  and  finally  by 
encouraging  to  some  extent  the  creation  of  new  sources  of  sup- 
ply. Here  the  War  Industries  Board  directly  served  the  great 
arms  of  the  Government  which  so  often  directly  served  it ;  and 
at  the  time  of  the  armistice  the  Board's  methods  were  meeting 
the  situation  and  providing  creosote,  although  in  somewhat 
small  quantities.  Still,  better  enough  creosote  to  go  around 
even  sparingly,  than  some  important  interest  left  out  in  the 
cold,  all  uncreosoted. 

Another  interesting  branch  of  industrial  control  concerned 
itself  with  paints  and  pigments.  There  was  never  a  shortage  of 
paints  in  America  during  the  war.  Americans  are  normally 
heavy  users  of  paint.  Abroad,  where  they  build  so  much  of 
stone  and  brick  and  so  little  of  wood,  the  paint  industry  is  rela- 
tively small.  In  America  most  of  the  houses  are  of  wood,  and 
wood  must  be  painted  or  it  will  deteriorate.  The  domestic  paint 
industry  has  grown  to  huge  size,  and  the  Paint  and  Pigment 
Section  did  not  have  to  stimulate  production;  but  there  were 
other  war  problems  for  it.  It  had  to  keep  in  close  touch  with 
the  paint  people  in  order  to  be  able  to  advise  government  pur- 
chasers in  drawing  their  specifications,  so  that  they  would  not 
specify  unusual  sorts,  hard  to  produce.  This  section  also 
assisted  in  conservation  measures  in  the  paint  industry,  look- 
ing to  economy  in  the  use  of  valuable  resources.  By  abolishing 
several  sizes  of  paint  cans,  it  saved  tin.  By  prohibiting  the 
manufacture  of  certain  shades  of  paint,  it  saved  precious  ship 
space  which  would  otherwise  have  had  to  be  devoted  to  import- 
ing the  required  pigments.  It  released  men  for  war  work  by 
substituting  women  for  men  in  paint  factories.  It  saved  addi- 
tional ship  space  by  curtailing  the  importation  of  shellac  and 
gums. 

One  more  example  of  activities  in  the  chemical  field,  and 
this  glimpse  of  the  chemical  family  of  the  commodity  sections 
will  end.  There  may  seem  to  be  little  connection  between  the 
distillation  of  hardwood  and  an  airman  hurling  bombs  at  a 


NITRATES— GLASS— DYES— CHEMICALS     127 

trench,  but  the  connotation  is  there.  From  distilled  hardwood 
comes  acetate  of  lime,  from  which,  in  turn,  comes  acetic  acid 
and  acetone,  both  of  them  essential  to  the  production  of  filler 
for  airplane  wings — the  so-called  "dope" — without  which  the 
planes  could  not  have  flown.  We  started  several  new  plants 
for  the  production  of  acetate  of  lime  both  for  ourselves  and 
for  the  Allies,  one  of  whom,  England,  used  acetone  in  the  pro- 
duction of  the  explosive,  cordite.  To  conserve  acetone  for  war 
use  we  stopped  the  use  of  it  in  the  manufacture  of  chloroform, 
putting  alcohol  in  its  place.  We  developed  several  new  ways 
of  producing  acetone — one,  the  Weisman  process,  obtaining  it 
from  fermenting,  sour,  low-grade  corn.  Had  the  war  lasted 
another  year,  we  should  have  astonished  the  world  with  a  pro- 
duction of  acetone  secured  without  ever  heating  a  stick  of 
hardwood.  We  should  have  taken  it  from  corn  and  also  from 
seaweed.  The  commodity  sections  had  to  lay  heavy  hands  on 
the  dye  factories,  the  tanning  extract  factories,  the  chrome- 
yellow  pigment  producers,  and  on  those  who  made  insecticides, 
to  force  them  to  cut  down  their  use  of  acetic  acid.  The  Board 
arbitrarily  curtailed  the  nonwar  use  of  the  acid  fifty  per  cent 
by  its  allocations,  thus  forcing  the  use  of  substitutes,  among 
which  are  vinegar,  lactic  acid,  formic  acid,  and  certain  salts. 

Thus,  and  in  examples  which  might  be  extended  indefinitely, 
the  commodity  sections  did  their  work.  Every  section  was 
headed  by  an  expert — a  man  who  knew  his  business  through 
and  through,  but  who  sold  a  lifetime  of  experience  to  his  Gov- 
ernment for  a  dollar  a  year.  Every  industry  was  represented  by 
a  war-service  committee,  which  served  without  even  the  dollar, 
but  yet  gave  its  best  to  the  Government. 


CHAPTER  IX 
COPPER  AND  EXPLOSIVES 

IF  Hans  and  Gretchen  and  several  million  other  German 
peasants  had  not  for  a  generation  cooked  their  sauerkraut 
in  copper  kettles,  the  war  might  have  ended  months  before 
it  did.  Adopting  many  policies  solely  for  their  usefulness  in 
possible  war,  Germany  for  many  years  consciously  encouraged 
her  population  in  the  use  of  copper.  Copper  kettles,  copper 
roofs,  copper  statues,  copper,  copper,  copper,  everywhere  in 
Germany — because  the  red  metal  is  indispensable  in  war,  and 
Germany  possesses  no  natural  supply  of  copper. 

The  United  States,  having  within  its  borders  the  greater 
part  of  the  world's  supply  of  copper,  naturally  anticipated  no 
difficulty  in  filling  its  own  needs  during  the  war;  but  then,  the 
country  anticipated  little  difficulty  in  many  other  matters 
which  proved  to  be  exceedingly  difficult.  Copper  was  no  excep- 
tion. The  supply  of  copper  was  one  of  our  greatest  war  prob- 
lems. 

A  war  needs  copper  for  many  purposes.  It  is  one  of  the  prin- 
cipal constituents  of  brass,  and  brass  is  the  only  practicable 
metal  for  cartridge  cases  for  small  arms  and  field  guns.  Copper 
goes  into  almost  every  piece  of  electrical  apparatus.  Copper 
wires  are  the  nerve  filaments  along  which  the  members  of 
the  army-body  flash  their  signals  to  the  brains  at  headquar- 
ters. Brass  tubing,  especially  for  the  condenser  pipes  of  steam 
engines,  makes  a  heavy  demand  for  copper,  and  brass  rodding 
of  a  hundred  sizes  is  needed  in  a  score  of  war  materials.  Cop- 
per rotating  rings  for  shell — to  "take"  the  rifling  of  the 
barrel — are  indispensable,  and  numerous  other  war  uses  call 
for  tons  and  tons  of  the  same  soft,  ductile,  strong  material. 

The  name  associated  with  copper  back  there  in  those  early 


Photo  from  Maritime  Manufacturing  Corporation,  St.  John,  N.  B. 

COPPER  BANDS  FOR  SHELL 


Photo  from   Canadian  Allis-Chalmers,   Ltd. 


THREE-INCH  BRASS  CARTRIDGE  CASES 


COPPER  AND  EXPLOSIVES  129 

war  days  was  that  of  Bernard  M.  Baruch.  On  the  Council  of 
National  Defense,  in  charge  of  the  development  of  the  raw 
materials  of  war,  Mr.  Baruch  clearly  foresaw  the  disastrous 
consequences  of  a  copper  shortage  in  our  impending  belliger- 
ency and  the  almost  equally  disastrous  results  of  a  copper 
price  soaring  unchecked;  and  he  was  most  active  in  negotia- 
tions with  the  copper  producers,  and  incidentally  was  roundly 
criticized  for  interfering  with  business  and  insisting  upon 
prices  which  the  critics  thought  would  injure  business.  Baruch 
was  determined  to  keep  the  copper  prices  down.  He  was  exe- 
crated as  a  marplot  and  a  foe  to  good  business — "the  man  who 
demands  lowering  prices."  Later  these  very  critics  came  to 
realize  that  Baruch  had  pursued  the  only  course  calculated 
both  to  conserve  the  copper  resources  and  to  prevent  chaotic 
conditions  in  the  industry  after  the  war. 

In  October,  1914,  one  could  buy  copper  for  11.4  cents  a 
pound.  By  March,  1917,  it  was  selling  for  35.74  cents  a 
pound,  and  the  United  States  had  not  yet  become  a  belligerent. 
Soliloquized  the  man  who  was  to  buy  our  first  war  copper: 
"If  demand  during  thirty  months  has  lifted  the  price  to  three 
times  its  normal,  what  is  going  to  happen  when  we  go  into  the 
war*?  If  demand  is  now  running  away  ahead  of  supply,  and  if 
something  isn't  done  right  away  to  curb  the  price  and  increase 
the  production,  America  may  find  her  whole  war  program 
halted  by  a  miserable  metal."  One  of  two  things  could  be  done. 
Either  the  price  could  go  unchecked,  on  the  theory  that  only 
by  such  forbearance  could  the  Government  encourage  the 
maximum  production,  or  else  the  Government  could  check  the 
price  and  trust  to  other  factors  to  increase  the  supply.  It  was 
the  familiar  dilemma  of  the  war  price  fixer;  but  in  that  day  it 
was  a  new  problem,  for  the  policy  of  general  price  control  was 
still  of  the  distant  future. 

Baruch's  mind  characteristically  went  straight  to  the  heart 
of  the  situation,  and  he  was  able  to  visualize  the  embarrass- 
ment to  the  nation  if  it  were  compelled  to  buy  copper  by 
billions  of  pounds  at  a  price,  say,  of  a  dollar  a  pound.  To  him 
the  way  ahead  was  plain.  It  was  price  control  in  copper,  with 


130  THE  GIANT  HAND 

production  stimulated  by  means  other  than  swollen  profits 
to  the  producers. 

His  decision  he  translated  into  action.  Two  weeks  before  we 
declared  war  he  called  a  meeting  of  the  heads  of  the  larger 
copper  companies.  For  a  week  this  conference  debated  the 
problem,  and  every  producer  came  from  the  discussion  with  a 
quickened  realization  of  the  part  copper  was  to  play  in  the 
forthcoming  struggle.  In  the  conference,  voluntarily, — the  sug- 
gestion came  from  two  of  the  largest  producers,  Messrs.  John 
D.  Ryan  and  Daniel  Guggenheim, — the  operators  agreed  to 
allow  the  Army  and  Navy  to  purchase  45,500,000  pounds  of 
copper  at  the  price  of  16.6739  cents  per  pound,  this  being  the 
average  selling  price  of  copper  over  the  preceding  period  of 
ten  years.  Since  the  market  price  of  copper  at  the  time  was 
almost  36  cents  a  pound,  the  purchase  represented  the  tidy 
saving  of  more  than  $8,500,000. 

And  it  represented  much  more  than  a  mere  saving  of  money. 
Psychologically  the  copper  bargain  was  of  immeasurable  im- 
portance. This  occurred  in  the  United  States,  where  the  hand 
of  the  outsider  had  never  before  violated  the  sacrosanct  pre- 
rogative of  business  to  charge  what  it  chose  for  its  products. 
And  here  came  a  man  whose  career  was  pitched  behind  the 
stanchest  bulwarks  of  property  rights,  in  Wall  Street,  and 
made  the  arrangement  whereby  property  rights  retreated  be- 
fore the  transcending  right  of  the  United  States  to  use  its  own 
resources  for  its  own  vital  purposes.  These  negotiations  plainly 
opened  the  door  to  the  regulation  of  resources  and  of  industry 
that  was  to  come  later  on.  The  historical  importance  of  the 
episode  was  out  of  all  proportion  to  the  mere  quantities  and 
values  involved. 

The  sixteen-cent  price  existed  only  for  the  Army  and  the 
Navy.  In  no  sense  was  it  a  "fixed  price,"  as  we  came  to  under- 
stand that  term  later.  The  Allies  and  the  commercial  buyers 
still  had  to  deal  with  the  open  copper  market.  We  were  not 
yet  at  war,  and  the  hand  of  authority  had  not  yet  grasped  the 
lever  of  full  control.  The  quantity  of  copper  over  which  this 
first  price  obtained  was  trivial  in  comparison  to  the  weight  of 


COPPER  AND  EXPLOSIVES  131 

copper  which  the  war  was  to  consume.  Forty-five  million 
pounds  seems  much,  but  in  1917  the  total  American  copper 
production  was  almost  two  and  a  half  billion  pounds;  and 
even  this  quantity,  it  was  soon  seen, — even  if  the  rate  of  pro- 
duction were  continued  in  1918, — was  not  going  to  be  enough. 
Hence  throughout  the  war  the  War  Industries  Board  con- 
ducted an  incessant  campaign  to  increase  the  production  of 
copper. 

At  the  outset  there  was  much  uncertainty  as  to  what  the 
permanent  copper  price  should  be.  The  ideal  price  was  one 
high  enough  to  produce  booming  industry  at  every  mine  and 
smelter,  and  no  higher.  The  sixteen-cent  price  of  the  famous 
Baruch  bargain  was  far  too  low  to  create  such  activity — only 
the  most  extensive,  lowest-cost  producers  could  have  supplied 
even  that  relatively  small  quantity  at  that  figure.  The  very 
next  army-navy  purchase  was  for  sixty  million  pounds  at  25 
cents,  the  market  then  standing  at  32.57  cents.  This  was  a 
tentative  price,  to  be  revised  in  either  direction  after  the  Fed- 
eral Trade  Commission,  which  meanwhile  had  instituted  an 
enquiry  into  the  costs  of  producing  copper,  should  make  its 
report. 

These  reduced  prices  began  to  create  havoc  in  the  copper 
industry.  The  copper  miners  were  paid  on  a  sliding  wage 
scale,  adjusted  to  the  price  of  copper.  Labor,  therefore,  spoke 
out  in  protest,  since  any  reduction  in  the  market  price  meant 
a  corresponding  reduction  in  wages,  in  the  face  of  living  costs 
going  steadily  up.  The  miners  threatened  to  strike  if  copper 
sold  below  thirty  cents;  and  strike  they  did.  The  Navy  was 
paying  in  cash  only  seventy-five  per  cent  of  the  25-cent  price, — 
18.75  cents, — leaving  the  balance  for  future  adjustment;  yet 
the  copper  people  were  unable  to  bill  their  product  at  this 
rate,  because  their  labor  would  not  agree  to  it.  Meanwhile  the 
Government's  debt  to  the  industry  was  rising  and  cramping 
the  producers  for  funds,  strikes  were  frequent,  the  refiners  were 
running  short  of  blister  copper  from  the  smelters,  and  general 
demoralization  took  charge. 

Among  the  official  purchasing  agencies  there  was  a  like 


132  THE  GIANT  HAND 

confusion  with  regard  to  prices  for  copper.  Each  bureau  was  as 
yet  making  its  own  bargains :  the  War  Industries  Board  was  as 
yet  only  an  advisory  body.  The  Board,  however,  recognized 
the  unwisdom  of  the  Navy's  tentative  price  of  18.75  cents  a 
pound  for  copper  and  advised  a  price  of  22.5  cents,  with  the 
remaining  2.5  cents  of  the  Government's  25-cent  price  left  to 
future  adjustment.  Still,  this  decision  was  followed  by  an 
official  offer  of  20  cents  for  copper,  together  with  the  threat 
to  commandeer  if  the  copper  were  not  forthcoming  at  that 
figure.  The  Board  kept  insisting  on  the  higher  offer,  however, 
and  eventually  had  its  way;  for  on  August  8,  1917,  the  pur- 
chasers confirmed  the  tentative  price  of  22.5  cents,  and  com- 
mandeering receded  as  a  possibility.  At  22.5  cents  the  Board 
purchased  77,000,000  pounds  of  copper  for  the  Allies. 

This  22.5-cent  price,  be  it  remembered,  was  not  final.  It  was 
merely  the  figure  which  the  Government  confessed  itself  obli- 
gated to  pay  in  any  event,  and  to  which  the  disbursing  officers 
were  authorized  to  go  in  their  payments  to  the  copper  people. 
The  producers  contended  that  the  Government,  after  a  full 
and  fair  investigation,  would  be  convinced  that  the  price  was 
too  low  and  would  fix  a  higher  one,  making  it  retroactive  to 
cover  the  previous  purchases  at  the  disputed  tentative  price. 
Then  came  the  report  of  the  Federal  Trade  Commission,  which 
declared  22  cents  to  be  enough  for  copper — a  half  cent  under 
the  disputed  tentative  price!  The  report  was  a  bombshell  in 
the  copper  camp,  and  the  producers  responded  with  a  barrage 
of  their  own. 

Like  other  industries,  the  copper  industry  presented  its  own 
peculiar  problem;  and  fundamentally  the  copper  problem  lay 
in  the  fact  that  the  ore  is  not  produced  exclusively  by  a  few 
great  properties,  such  as  the  Calumet  &  Hecla  mine,  but  by 
scores  and  even  hundreds  of  small  mining  operations  as  well. 
The  costs  of  the  small  producer  are  apt  to  be  high,  so  that  the 
price  which  brings  profits  rolling  into  the  big,  low-cost  com- 
pany may  mean  losses  and  shutdowns  for  scores  of  the  little, 
high-cost  developments.  Under  the  special  conditions  of  war 
the  Government  could  therefore  not  safely  consider  the  aver- 


Photo  from   Recording  6?   Computing  Machine   Company 

PACKING  SHELL  FUSES 


BOILING  TUBS  FOR  SMOKELESS  POWDER 


COPPER  AND  EXPLOSIVES  133 

age  conditions  in  the  industry,  in  any  attempt  to  fix  the  price. 
To  base  a  fixed  price  on  the  average  cost  of  production  would 
be  to  shut  out  and  close  down  dozens  of  producers  whose  costs 
were  higher  than  average,  but  whose  product  the  Government 
had  to  have  for  its  war  purposes.  A  war  price  had  to  be  high 
enough  to  keep  the  whole  industry  at  work — with  a  reasonable 
limitation,  of  course ;  for  even  the  War  Government  could  not 
afford  to  pay  too  great  a  price  for  the  protection  of  the  ultra- 
high-cost  copper  producer. 

This  argument  the  industry  put  forward  in  reply  to  the 
report  of  the  Federal  Trade  Commission.  The  big,  low-cost 
producers  agreed  frankly  that  the  Commission's  22-cent  price 
let  them  out  nicely,  but  they  contended  that  the  price  would  be 
disastrous  to  the  high-cost  men.  They  pointed  out  the  imprac- 
ticability, if  not  the  impossibility,  of  the  Government's  com- 
mandeering and  operating  a  multitude  of  small  copper  mines. 
Moreover,  they  reminded  the  War  Industries  Board  that  the 
mine  workers  had  a  direct  interest  in  the  copper  price,  and 
voiced  their  opinion  that  the  Commission's  22-cent  price  meant 
certain  labor  troubles,  even  in  the  low-cost  mines,  with  a  re- 
sultant falling  off  in  production.  The  industry  proposed  an 
alternative  price  of  25  cents.  The  War  Industries  Board  was 
impressed  by  the  argument  and  agreed  to  halve  the  difference 
between  the  Commission's  price  (22  cents)  and  the  industry's 
price  (25  cents),  making  the  price  23.5  cents.  This  price  was 
to  be  subject  to  a  possible  revision  upward  at  the  end  of  four 
months,  provided  that  increasing  production  costs  then  jus- 
tified it.  In  this  arrangement  the  industry  concurred,  promising 
moreover  to  keep  production  at  top  pitch.  The  President  of  the 
United  States  approved  the  figure,  and  it  was  officially  fixed. 
It  applied  not  only  to  government  purchases,  but  to  purchases 
by  the  Allies  and  by  private  consumers  as  well — it  stood  as 
the  market  price  for  all.  The  industry  agreed  further  to  keep 
copper  out  of  the  hands  of  the  speculators.  Wages,  moreover, 
were  not  to  be  reduced  because  the  price  was  under  the  general 
market  price  at  the  time. 

Thus  came  about  the  stabilization  of  the  war  copper  indus- 


134  THE  GIANT  HAND 

try;  and  copper  thus  shares  with  steel  the  honor  of  having  led 
all  of  American  industry  under  federal  control  during  the  war. 
One  thing  should  be  stated  emphatically.  In  all  these  negotia- 
tions leading  up  to  the  adoption  of  a  fixed  price,  the  Govern- 
ment's two  largest  consumers  of  copper,  the  Army  and  the 
Navy,  always  took  part.  Critics  of  the  War  Industries  Board 
have  maintained  the  contrary — that  the  Board  gave  the  earth 
to  the  copper  people  without  consulting  the  chief  governmental 
users  of  the  metal.  That  charge,  however,  was  unjustified.  The 
representatives  of  the  Army  and  the  Navy  took  part  in  all  of 
the  conferences,  and  their  voices  were  heard  and  considered. 
The  Board  consulted  them  before  taking  any  final  action,  and 
they  themselves  approved  the  final  action  before  it  was  pro- 
mulgated to  the  industry. 

In  July,  1918,  the  Price  Fixing  Committee  being  then  in 
charge  of  all  price  fixing,  the  fixed  price  of  copper  was  raised 
to  26  cents  a  pound.  This  measure  was  taken  upon  the  repre- 
sentations of  fifteen  small,  high-cost  producers  (their  aggre- 
gate output  was  75,000,000  pounds  of  copper  per  annum)  that 
the  rising  freight  rates  and  wage  scales  had  made  the  old  price 
unprofitable  to  them.  At  26  cents  the  price  remained  until 
federal  control  ceased.  By  the  summer  of  1918,  so  great  had 
grown  the  war  industrial  program  that  the  Government  was 
taking  ninety-three  per  cent  of  the  total  copper  production  of 
the  United  States,  though  it  turned  over  to  the  Allies  nearly 
half  of  its  copper  purchases. 

Besides  fixing  the  copper  prices,  the  War  Industries  Board 
had  the  great  responsibility  of  administering  them,  and  other- 
wise controlling  the  industry.  This  work  was  the  charge  of 
the  Nonferrous  Metals  Section  of  the  Board,  which  watched 
over  production,  encouraged  the  small  producers,  guarded 
against  speculation,  cooperated  with  the  Copper  Producers' 
War-Service  Committee,  and  allocated  and  distributed  the 
copper.  Mr.  Eugene  Meyer,  Jr.,  was  the  first  chief  of  the 
Nonferrous  Metals  Section,  serving  from  October,  1917,  to 
March,  1918,  after  which  he  was  succeeded  by  Mr.  Pope  Yeat- 
man,  who  remained  in  charge  until  the  end. 


COPPER  AND  EXPLOSIVES  135 

This  was  the  answer  to  the  threatened  copper  shortage — the 
Government  secured  enough  copper,  the  stimulated  industry 
increasing  its  rate  of  production  fifty  per  cent,  and  the  indus- 
try itself  survived  the  experience  and  was  ready  to  go  ahead 
in  the  normal  way  after  the  control  ceased.  To  be  sure,  price 
fixing  worked  hardship  to  a  few  of  the  highest-cost  properties ; 
but  in  war  industry,  as  in  war,  some  blood  must  be  shed.  The 
larger  vision  sees  the  dominant  fact  that  the  program  of  muni- 
tions manufacture,  either  here  or  in  the  countries  of  the  Allies, 
did  not  halt  because  of  any  break  in  the  red  stream  flowing 
from  American  copper  mines,  smelters,  and  refineries. 

The  critical  ocean-shipping  situation  bore  directly  upon  one 
of  the  principal  activities  of  the  War  Industries  Board — 
namely,  its  work  in  building  up  the  American  explosives  indus- 
try. Because  of  the  deficit  in  tonnage  it  was  necessary  to  give 
most  careful  consideration  to  the  form  in  which  munitions 
crossed  the  ocean.  Leaving  aside  the  fact  that  the  Allies  had 
developed  munitions  manufacturing  capacity  beyond  their  own 
needs,  for  shipping  reasons  it  was  good  economy  and  good 
strategy  for  us  to  buy  a  great  deal  of  our  battle  machinery 
from  the  Allies  over  there,  sending  them  the  raw  and  semi- 
finished materials  from  which  to  produce  the  machinery,  rather 
than  to  do  the  manufacturing  ourselves  and  then  ship  the 
finished  machinery  across  the  ocean.  For  instance,  a  field  gun 
crated  and  stowed  aboard  a  ship  occupies  a  space  that  can 
hold  raw  materials  enough  to  build  seven  guns.  In  the  space 
occupied  by  a  crated  airplane  nine  airplanes  can  travel  in 
their  raw  materials.  Similarly  disproportionate  ratios  hold  for 
many  other  implements  of  war.  But  when  you  come  to  explo- 
sives, the  ratio  swings  over  in  just  the  opposite  direction — the 
finished  explosive  products  occupy  only  from  one-twentieth  to 
one-tenth  as  much  ship  space  as  their  raw  materials. 

It  may  be  surmised  that  this  fact  had  a  profound  influence 
upon  the  development  of  munitions  manufacture  in  the  United 
States.  From  Chaumont  General  Pershing  continually  urged 
that  America  buy  as  many  of  her  heavy  ordnance  and  aircraft 


136  THE  GIANT  HAND 

supplies  as  possible  in  Europe,  shipping  the  raw  materials  in 
compensation  to  the  Allies.  The  tendency  to  such  a  procedure 
was  purely  a  voluntary  one  on  our  part  until  the  autumn  of 
1917,  when  the  Supreme  War  Council  in  Paris,  planning 
scientifically  for  America's  cooperation  in  the  war,  issued  the 
edict  known  as  the  Interallied  Ordnance  Agreement,  which, 
while  providing  that  the  American  Expeditionary  Forces 
should  procure  most  of  their  field  ordnance  and  service  air- 
planes from  England  and  France  during  the  first  year  of  the 
agreement's  existence  (it  was  evident  that  the  war  industry  of 
America  could  not  produce  these  things  in  quantity,  anyhow, 
before  the  expiration  of  another  year),  placed  upon  the  United 
States  the  obligation  to  supply  all  powder  and  high  explosives, 
not  only  to  her  own  forces,  but  to  half  the  French  Army  as 
well. 

This  was  a  tremendous  responsibility,  and  no  one  in  America 
accepted  it  in  more  deadly  earnest  or  felt  its  weight  more 
heavily  upon  his  shoulders  than  did  Bernard  M.  Baruch. 
Others  might  at  times  forget,  in  the  press  of  great  affairs,  the 
surpassing  importance  of  the  American  explosives  industry; 
but  not  Baruch.  He  felt,  and  justly  so,  that  America  might  fail 
in  any  other  part  of  her  war  program  and  still  manage  some- 
how to  struggle  along  through;  but  if  she  failed  in  this  one 
specific  responsibility  which  the  hard-pressed  Allies  had  placed 
upon  her,  that  would  be  tantamount  to  failure  in  the  whole 
program,  and  she  would  lose  prestige  and  honor  and  probably 
the  victory  itself.  Whatever  the  magnitude  of  the  other  official 
activities  in  which  he  engaged,  he  consistently  regarded  them 
all  as  subordinate  to  the  force  majeure,  the  iron  necessity  for 
America  to  produce  powder  and  high  explosives.  Powder  was 
his  passion,  his  impelling  thought  by  day  and  his  uneasy 
dream  at  night.  He  fought  for  ships,  even  as  against  the  Army's 
necessity  to  maintain  its  transatlantic  supply  line,  to  bring  the 
nitrate  from  Chile ;  he  put  all  his  power  behind  the  air-nitrates 
project  at  home;  he  looked  out  for  sulphur  and  linters;  for  him 
illuminating  gas  lost  all  importance  except  as  it  was  a  source 
of  toluol;  he  initiated  and  supported  projects  to  multiply  the 


Photo  by  Boy'e 

D.  C.  JACKLING 

Director  of  U.  S.  Government  'Explosives  Plants 


COPPER  AND  EXPLOSIVES  137 

American  equipment  of  by-product  coke  ovens,  to  take  tar 
intermediates  from  crude  oil,  to  build  powder  plants  that  were 
industrial  cities  in  themselves;  and  his  hand  was  felt  in  the 
dozen  other  ramifications  of  powder  manufacture  throughout 
industry. 

The  result  of  these  activities — and  this  is  detracting  noth- 
ing from  the  magnificent  achievements  of  the  Army's  own 
Ordnance  Department,  which  looked  after  the  more  concrete 
details  of  building  the  factories  and  turning  out  the  explo- 
sives— may  be  read  in  the  utterly  astounding  figures  of  Ameri- 
can explosives  production  during  the  war.  In  little  more  than 
a  year — in  less  than  a  year,  dating  the  period  from  the  Inter- 
allied Ordnance  Agreement — America  developed  an  industry 
which  was  turning  out  smokeless  powder  nearly  half  again  as 
fast  as  the  industries  of  France  and  England  combined,  and 
which  had  nearly  reached  the  combined  French  and  English 
rate  of  producing  high  explosives.  This  was  the  response  of 
American  war  industry  to  its  one  greatest  test.  You  could  wipe 
from  the  record  all  else  that  the  War  Industries  Board  did, 
and  its  activities  in  expanding  the  American  explosives  indus- 
try would  alone  justify  its  place  in  the  War  Government. 

Developing  the  powder  industry  was  a  case  of  building  from 
the  ground  up,  and  building,  too,  an  industry  to  be  both  owned 
and  operated  by  the  Government.  The  existing  powder  com- 
panies were  naturally  unwilling  to  invest  in  colossal  new 
plants  that  would  have  only  junk  value  when  the  fighting 
ended.  Nor  was  it  a  question  of  commandeering  or  even  of 
price  fixing.  For  the  War  Industries  Board  it  was  a  matter 
of  correlating  all  efforts  to  the  single  end,  linking  up  the  exist- 
ing producers  in  the  general  scheme,  and  developing  the  new 
production  centers  and  the  men  to  operate  them. 

The  name  of  Mr.  L.  L.  Summers  comes  into  the  record.  He 
was  technical  adviser  to  the  War  Industries  Board.  His  assist- 
ant was  Mr.  Charles  D.  McDowell.  These  two  were  indus- 
trial experts  on  whom  the  Board  leaned  heavily  in  planning 
the  creation  of  the  explosives  industry.  Then  there  was  the 
Board's  Explosives  Division — not  a  commodity  section,  be  it 


138  THE  GIANT  HAND 

noted,  but  a  major  branch  of  the  Board  itself.  Mr.  M.  F. 
Chase  was  chief  of  the  Division.  He  was  called  to  this  posi- 
tion from  important  work  in  the  erection  of  the  great  powder 
plant  at  Nitro,  West  Virginia.  The  Explosives  Division  made 
statistical  studies  of  existing  plants  and  potential  facilities,  of 
sites  and  plant  organizations,  and  worked  out  plans  for  train- 
ing the  new  forces  of  powder  makers  and  for  improving  the 
efficiency  of  the  new  plants.  In  this  development  it  was  neces- 
sary to  preserve  and  even  increase  the  normal  manufacture  of 
commercial  explosives  for  the  sake  of  other  branches  of  war 
industry  which  needed  them.  In  the  manufacture  of  some  of 
the  most  extensively  used  products  it  was  necessary  to  adopt 
new  and  improved  processes,  worked  out  by  the  Allies  during 
their  long  struggle  with  Germany.  The  development  in 
powder  making  had  to  be  quite  outside  the  facilities  existing 
in  the  United  States  when  war  was  declared.  The  explosives 
business  had  expanded  considerably  between  1914  and  1917. 
Several  large  plants  had  been  built  in  America  for  the  Allies. 
The  Allies  had  paid  a  dollar  a  pound  for  their  American  smoke- 
less powder,  half  of  each  dollar  applying  to  the  amortization  of 
the  factories  erected  especially  for  them.  Our  war  explosives 
industry  had  to  be  reared  without  disturbance  to  this  going 
enterprise. 

When  Uncle  Sam  really  starts  out  to  do  anything  big,  he  is 
prone  to  make  that  thing  the  biggest  in  the  world.  It  was  so 
with  the  Hog  Island  shipbuilding  project,  with  the  Panama 
Canal,  with  the  western  land  reclamation  scheme,  and  with 
railroad  and  telephone  systems.  When  the  United  States  Gov- 
ernment began  building  powder  plants  it  built  them  big  enough 
to  be  seen  from  the  moon.  The  Old  Hickory  plant  at  Nash- 
ville, costing  $90,000,000,  had  an  area  of  nearly  eight  square 
miles.  It  was  seventy  times  the  size  of  the  biggest  powder 
plant  of  prewar  days.  This  and  the  Nitro  plant  were  in  1919 
to  have  supplied  the  powder  which  would  have  propelled  more 
than  half  of  all  the  shell  sent  against  the  enemy. 

The  reader  will  note  that  the  War  Industries  Board  made 
no  contracts,  either  in  this  enterprise  or  in  any  other  of  its 


COPPER  AND  EXPLOSIVES  139 

activities.  In  developing  the  explosives  program  its  function 
was  to  recommend,  in  consultation  with  the  War  Department, 
the  erection  of  plants,  and,  after  contracts  were  placed,  to  see 
that  the  contractors  secured  materials,  labor,  power,  and  other 
necessary  facilities.  The  Army  itself  selected  sites,  signed  the 
contracts,  and  superintended  production  in  the  completed 
plants. 

One  interesting  branch  of  the  War  Industries  Board's  work 
in  explosives  was  that  concerned  with  the  supply  of  cotton 
linters.  It  has  been  said  that  the  Chicago  meat-packing  estab- 
lishments utilize  all  of  a  pig  except  the  squeal.  Cotton  linters 
are  the  squeal  of  cotton.  At  one  time  they  were  an  utter  waste ; 
now  they  have  become  of  practically  indispensable  value  in 
the  production  of  powder.  When  cotton  goes  through  the  gin, 
the  seed  comes  out  covered  with  a  fine  cotton  fiber  sticking  to 
the  rough  surfaces  of  the  seed.  Removed  at  the  cottonseed 
crushing  plants  by  an  arrangement  of  revolving  saw  blades, 
this  fine  fiber,  known  as  cotton  linters,  is  used  in  times  of 
peace  for  stuffing  mattresses,  pads,  and  horse  collars.  It  is  also 
used  in  the  manufacture  of  felts,  absorbent  cotton,  and  other 
similar  products  where  a  long-fiber  cotton  is  not  necessary. 
Another  common  product  of  which  cotton  linters  may  be  a  con- 
stituent is  celluloid,  the  most  extensive  use  of  which  to-day  is, 
perhaps,  in  motion  picture  films. 

Now  celluloid  is  the  quiet  and  inoffensive  brother  of  the 
more  truculent  guncotton  and  smokeless  powder.  All  three  are 
members  of  the  cellulose  family.  Guncotton  is  one  form  of 
nitrocellulose  (an  inexact  term  for  cellulose  nitrate),  and 
smokeless  powder  is  guncotton  specially  prepared.  Cotton  lint- 
ers contain  cellulose  in  ideal  form  for  nitrating.  It  is  evident, 
then,  that  our  boundless  powder  program  called  for  linters  in 
boundless  quantities. 

It  was  necessary  for  the  War  Industries  Board  to  take 
charge  of  the  supply  of  cotton  linters,  for  the  reason  that  the 
average  annual  production  of  linters  at  the  seed  mills  for  the 
five  years  prior  to  the  war  had  been  less  than  half  the  estimated 
quantity  which  we  were  going  to  require  in  1919  alone.  The 


i4o  THE  GIANT  HAND 

Cotton  Linters  Commodity  Section  (under  Mr.  George  R. 
James)  had  to  work  on  the  familiar  conservation-substitution 
plan,  since  it  was  not  practicable  to  encourage  a  largely  in- 
creased cotton  crop  merely  to  get  more  1  inters.  The  section 
accordingly  added  its  own  particular  swarm  to  the  locust 
plague  of  questionnaires  which  was  then  fretting  American 
industry,  and  elicited  the  fact  that  cotton  linters  were  really 
not  absolutely  essential  to  many  of  the  departments  of  indus- 
try which  used  them  extensively.  For  instance,  horse  collars 
and  mattresses  could  be  stuffed  with  hay  or  feathers  or  some- 
thing else  quite  as  well  as  with  linters.  The  Ordnance  Depart- 
ment, foreseeing  a  linters  shortage,  was  experimenting  to  see 
if  hull  fiber  and  wood  pulp  would  not  furnish  cellulose  as 
usable  as  that  of  cotton;  but  the  Cotton  Linters  Section  did 
not  wait  for  the  outcome  of  the  experiments.  It  called  a  meet- 
ing of  the  cottonseed  crushers  and  with  them  reached  an  agree- 
ment that  after  May  2,  1918,  all  the  mills  would  sell  their 
entire  production  to  the  powder  plants  exclusively.  The  pro- 
ducers agreed  to  recover  at  least  145  pounds  of  linters  from 
each  ton  of  cottonseed,  while  the  Government  for  its  part 
agreed  to  take  the  entire  output  until  July  31,  1919,  paying 
$4.67  a  hundred  pounds. 

This  was  constructive  work.  It  relieved  the  seed  crushers  of 
any  and  all  marketing  difficulties,  stabilized  the  industry  by 
a  fixed  price,  prevented  profiteering,  and  produced  for  the 
powder  factories,  if  not  all  the  linters  they  wanted,  at  least  all 
that  existed.  The  American  factories,  however,  were  not  to 
have  the  whole  supply  thus  made  available  for  purely  war  use. 
France,  England,  Italy,  Belgium,  and  Canada  all  had  to  have 
American  linters,  as  did  also  our  own  makers  of  medical  sup- 
plies, particularly  those  who  supplied  absorbent  cotton  to  the 
Army.  Hence  there  was  formed  a  cotton  linters  pool,  in  which 
all  the  essential  interests  were  represented.  The  Ordnance 
Department  acted  as  general  manager  and  financier  for  the 
pool,  working,  however,  in  cooperation  with  the  Cotton  Linters 
Section  of  the  War  Industries  Board. 

The  partition  of  work  in  the  pool  exemplified  the  way  in 


Photo  from  Nitro  Powder  Company 


T.  N.  T.  COOLING  AND  CRYSTALLIZING 


Photo  from   Canadian  Explosives,  Ltd. 


A  T.  N.  T.  PLANT 


COPPER  AND  EXPLOSIVES  141 

which  the  Board  avoided  duplication  of  effort  and  the  friction 
inseparable  from  any  conflict  of  authority.  Before  the  pool 
began  its  operation,  a  strict  agreement  was  reached  between 
the  Ordnance  Department  and  the  Cotton  Linters  Section  as  to 
what  part  each  should  play.  The  Ordnance  Department  was  to 
handle  questions  of  production  and  of  the  stimulation  of 
supply;  it  was  to  commandeer  any  seed  plants  that  could  not 
be  brought  to  time  in  any  other  way ;  and  it  was  to  supply  the 
funds  for  the  pool,  settle  disputes  with  the  producers,  and, 
finally,  to  make  the  purchases  of  linters.  This  last  function 
the  Ordnance  Department  chose  to  delegate  to  the  DuPont 
American  Industries,  Inc.,  one  of  the  numerous  DuPont  cor- 
porations. There  were  literally  thousands  of  small  seed  plants 
producing  linters;  and  to  turn  over  to  a  concern  acquainted 
with  the  business  the  work  of  purchasing  the  linters  was 
thought  to  be  far  better  than  for  the  Government  itself  to 
attempt  so  intricate  a  job  with  its  unskilled  hands.  The  Cot- 
ton Linters  Section,  on  the  other  hand,  was  to  allocate  the 
linters  to  the  various  consumers,  store  the  bales  when  the  pro- 
duction from  the  seed  plants  exceeded  the  storage  capacity  at 
the  powder  mills,  write  the  specifications  for  cutting  and 
baling,  compile  periodic  reports  showing  past  and  estimated 
future  production  and  stock  on  hand,  and  finally  to  keep  the 
records  of  the  pool.  During  its  life  the  pool  handled  about 
500,000  bales  of  linters. 

With  this  glimpse  of  the  Cotton  Linters  Section  we  must 
close  the  present  record  of  the  work  of  the  commodity  sections 
of  the  War  Industries  Board.  We  have  been  able  to  take  up 
but  a  dozen  or  so  of  the  fifty-seven,  leaving  it  to  the  imagina- 
tion of  the  reader  to  fill  in  the  other  details  of  the  picture  of 
activity  that  was  the  War  Industries  Board  in  those  busy  days 
of  1918.  In  all  the  others  there  was  the  same  play  of  ingenuity, 
the  same  grasp  of  the  subject,  the  same  inexorable  pursuit  of 
the  common  end.  The  commodity  sections  were  the  Board's 
line  organization,  its  combat  regiments  in  the  field.  As  a  device 
in  organization,  they  were  the  creation  of  the  chairman  of  the 
War  Industries  Board;  and  whenever  Mr.  Baruch  paused  in 


142  THE  GIANT  HAND 

his  own  work  to  observe  the  working  of  this  mechanism,  he 
must  have  glowed  with  satisfaction  at  the  jarless,  competent 
manner  in  which  it  took  several  thousand  unrelated  shops, 
mills,  and  factories  and  knit  them  together  into  a  single 
stupendous  arsenal. 


CHAPTER  X 
FOREIGN  ACTIVITIES 

A  SHADOW  is  an  inconsequential  sort  of  thing.  But, 
once  in  a  lifetime  or  so,  it  happens  to  be  the  shadow 
of  the  moon;  and  as  the  sun  blinks  out,  savages  beat 
tom-toms,  and  the  superstitious  fall  on  their  knees  and  pray, 
and  even  some  of  the  best-balanced  feel  glad  when  that  particu- 
lar shadow  has  moved  on.  The  War  Industries  Board  had  a 
shadow,  too.  In  an  eastwardly  direction  its  tangible  authority 
ended  at  the  three-mile  limit.  But  it  found  itself  able  to  pro- 
ject its  shadow  over  the  war  industries  of  the  various  Allies, 
to  insert  its  opaque  disc  between  the  Allies  and  the  life-giving 
sun  of  American  resources  and  American  gold;  and  then  min- 
istries fell  to  their  knees  in  submission,  and  the  shadow  of  the 
Board's  authority  in  Europe  became  almost  as  real  and  effec- 
tive as  if  it  had  been  transmuted  into  substance  by  British 
Orders  in  Council  and  French  parliamentary  edict. 

The  authority  thus  projected  was  used — rather  late,  it  is 
true,  but  with  results  which  would  have  been  of  inestimable 
importance  had  the  war  continued  another  year — to  force  the 
war  industries  of  the  Allies  under  the  same  sort  of  govern- 
mental control  which  we  were  applying  to  American  indus- 
try, and — even  more  important — to  synchronize  and  coordi- 
nate the  entire  industrial  effort  of  the  nations  at  war  with 
Germany,  even  as  General  Foch  and  the  Supreme  Command 
were  coordinating  the  combined  forces  in  the  field.  It  was  a 
tremendous  ambition,  but  one  toward  the  fulfillment  of  which 
great  strides  had  been  made  when  the  war  came  to  its  abrupt 
end.  It  remained  for  America  and  the  War  Industries  Board 
to  initiate  the  project  and  to  insist  upon  it  and  take  a  hand  in 
its  fulfillment;  for  the  Allies  were  only  lukewarm  in  their 


144  THE  GIANT  HAND 

support  of  it,  and  the  strongest  one  of  them  in  particular — 
England — was  at  first  strongly  averse  to  it.  What  else  could 
they  do,  however,  but  follow  the  wishes  of  the  War  Industries 
Board,  since  that  body  at  any  time  could  cause  the  treasury 
purse  strings  to  be  tightened  *? 

The  agency  which  exerted  this  power  abroad  was  the  For- 
eign Mission  of  the  War  Industries  Board,  with  whose  enter- 
prises this  chapter  is  chiefly  concerned.  The  Mission  worked 
merely  as  the  representative  of  the  United  States  in  indus- 
trial conferences  which  affected  the  United  States.  It  possessed 
no  legal  power,  and  was  advisory  only  in  status;  but  actually 
it  held  the  terrific  power  of  boycott.  Armed  with  this,  it  had 
its  way  wherever  it  chose  to  insist  upon  it.  Its  deeds  were  little 
known  to  the  people  of  the  United  States  at  the  time  and  have 
been  uncelebrated  since ;  but  it  is  submitted  that  no  other  work 
of  the  War  Industries  Board  was  more  interesting  or  histori- 
cally so  altogether  notable  and  important. 

Some  mention  has  already  been  made  of  the  formation,  in 
the  fall  of  1917,  of  the  International  Nitrates  Executive  in 
London,  a  pooling  arrangement  in  which  the  Allies  and  Amer- 
ica dealt,  as  a  single  purchasing  agency,  with  the  Chilean 
industry.  This  was  the  first  of  several  such  international  execu- 
tives formed  to  purchase  other  war  commodities  for  interna- 
tional purposes;  and,  since  it  was  the  forerunner,  it  is  worth 
while  further  to  examine  its  workings.  It  was  rather  a  difficult 
undertaking  to  establish  this  first  Executive.  In  most  of  the 
participants,  national  pride  had  to  be  submerged,  national 
foreign  trade  protected,  and  national  selfishness  subordinated 
to  the  common  good.  The  Executive  was  supreme  in  the  pur- 
chase of  nitrates  from  Chile — the  entire  market  for  the  Chilean 
producers  had  become  monopolized.  The  War  Industries  Board 
acted  in  America  as  the  agent  of  the  Executive.  No  American 
interests  were  permitted  to  purchase  Chilean  nitrate  except 
through  the  Board.  The  Board  took  the  American  requisitions 
for  nitrates  and  forwarded  them  to  the  American  representa- 
tive on  the  Executive  in  London.  To  the  Executive  came  also 
the  requisitions  from  all  other  countries  which  had  access  to 


Photo  from  Pollack  Steel  Company 

SHAFT  FOR  U.  S.  DESTROYER 


Photo  from  Caron  Brothers,  Montreal 

BATTERY  OF  SHELL  MACHINES 


FOREIGN  ACTIVITIES  145 

the  nitrate.  Thus  the  Executive  could  allocate  the  nitrates 
equitably.  If  the  American  requisitions  were  approved,  the 
Executive  authenticated  the  orders  and  authorized  the  Chilean 
market  to  honor  the  American  orders  at  the  pool's  price. 

Note,  however,  that  the  Executive  did  not  itself  actually 
purchase  the  nitrates  for  the  American  interests.  Such  a  policy 
would  have  removed  from  business  the  American  concerns 
whose  business  it  was  to  deal  in  Chilean  nitrates.  Instead,  the 
Executive  merely  supervised  the  transaction.  The  actual  pur- 
chases were  made  by  the  American  agencies  authorized  by 
the  War  Industries  Board  to  buy  nitrates.  Had  the  Executive 
itself  bought  the  nitrate,  it  is  quite  possible  that  the  end  of 
the  war  would  have  found  English  trade  interests  in  possession 
of  an  ironclad  monopoly  of  the  Chilean  nitrate  trade.  The 
purchasing  director  of  the  Nitrates  Executive  was  Mr.  Her- 
bert Gibbs,  a  former  director  of  the  Bank  of  England  and 
head  of  the  firm  of  Antony  Gibbs  &  Sons,  a  British  importing 
house  heavily  interested  in  Chilean  nitrates.  He  was  merely 
the  director  of  purchases,  however,  and  not  a  purchasing  agent : 
the  rules  of  the  Executive  required  him  to  make  the  American 
purchases  exclusively  through  American  firms. 

The  agency  as  thus  constituted  protected  the  American 
trade,  but  at  the  same  time  it  gave  America  and  every  other 
participant  the  advantage  of  dealing  with  the  Chilean  industry 
as  a  unit.  The  Executive  was  able  to  keep  down  the  prices, 
incidentally  causing  heavy  losses  to  the  Chilean  speculators  in 
nitrate,  but  saving  a  vast  amount  of  money  to  the  belligerent 
nations. 

Curiously  enough,  the  very  fact  that  Chile's  monopoly  of 
sodium  nitrate  was  insufficient  to  meet  the  war  demand  for  the 
commodity  acted  as  a  deterrent  upon  high  prices.  Chile  was 
aware  that  extensive  programs  for  the  construction  of  plants 
for  the  fixation  of  atmospheric  nitrogen  had  been  instituted  in 
both  France  and  England  as  well  as  in  the  United  States.  The 
higher  and  more  embarrassing  the  price  of  natural  nitrates 
became,  the  more  these  programs  would  be  expanded  and  the 
more  zealously  would  they  be  pushed.  A  fixation  plant  is  no 


146  THE  GIANT  HAND 

ephemeral  war  plant :  it  must  be  built  to  stay ;  and  it  was  quite 
possible  that  undue  prices  in  Chile  would  have  the  effect  of 
creating  fixation  industries  of  such  size  that  England,  France, 
and  the  United  States  would  find  themselves  forever  free  of 
the  Chilean  monopoly.  The  Latin-American  Republic  showed 
a  commendable  fear  of  killing  the  European  and  North  Ameri- 
can geese  that  had  laid  so  many  golden  eggs  for  her  and  would 
continue  to  lay  them,  if  kindly  treated.  Chile,  in  fact,  was 
under  the  impression  that  our  fixation  project  was  further 
advanced  than  it  really  was — a  notion  of  which  our  canny 
purchasers  forbore  to  disabuse  the  Chilean  mind.  Throughout 
the  episode  we  took  all  the  nitrate  we  could  get,  whether  there 
were  immediate  need  for  it  or  not,  lest  one  or  both  of  two 
possibilities  occur.  The  enemy  submarines  might  cut  the  line 
of  supply,  and  the  Chilean  producers  might  take  it  into  their 
heads  to  bleed  the  belligerents  white  in  increased  nitrates 
prices.  In  consequence  the  armistice  found  us  with  a  consider- 
able surplus,  which  then  could  be  turned  over  to  agriculture 
and  the  arts. 

So  effectively  did  the  Nitrates  Executive  work,  so  harmoni- 
ous were  the  international  relations  under  it,  that  the  War 
Industries  Board  desired  to  extend  the  plan  to  the  purchase  of 
other  materials  that  were  giving  trouble.  The  Board  also 
wished  to  have  a  first-hand  look  at  what  uses  the  Allies  were 
making  of  the  steel  and  other  commodities  which  we  were 
sending  them  in  such  quantities.  We  were  starving  our  own 
nonwar  manufacture  to  create  these  export  excesses,  and  the 
Board  did  not  propose  to  have  nonessential  industry  in  Europe 
fed  with  materials  at  the  expense  of  our  own  rationed  pro- 
ducers. To  that  end  the  Board  sent  Mr.  Leland  L.  Summers, 
the  technical  adviser  of  the  Board,  to  be  the  European  outpost 
of  American  industrial  control  and  the  head  of  its  so-called 
Foreign  Mission. 

Why  was  it  left  for  the  War  Industries  Board  of  America 
to  initiate  international  industrial  cooperation  in  war,  to  insist 
upon  it  and  demand  it,  when  such  a  plan  was  going  to  save 
money  for  all?  Why  had  not  England,  France,  and  Italy 


FOREIGN  ACTIVITIES  147 

started  something  like  this  themselves  long  before  the  War 
Industries  Board  became  a  factor  in  the  war1?  The  answer  was 
plain.  Nationally  it  would  have  been  a  good  thing  for  all  the 
Allies.  But  industrially  they  had  nothing  to  gain  by  it.  The 
war  industries  of  the  Allies  were  far  less  whole-heartedly  for 
victory  at  the  cost  of  individual  gain  than  our  own  war  indus- 
try was;  moreover,  their  industries  were  far  more  powerful 
in  the  councils  of  government.  We  on  the  other  hand  had  an 
interest  other  than  industrial — with  our  loans  to  the  Allies  we 
were  largely  financing  their  war  programs ;  and  it  was  of  vital 
importance  to  us  that  they  pare  down  their  industrial  profits. 
It  is  a  pregnant  fact  that  Mr.  Summers  took  with  him  a  com- 
mission to  advise  the  Treasury  in  Washington  as  to  loans  to  be 
made  to  the  Allies. 

Mr.  Baruch  took  up  with  the  British  Ambassador  here  and, 
through  Mr.  Summers,  with  Mr.  J.  Austen  Chamberlain  in 
London,  the  matter  of  controlled  prices  in  English  war  indus- 
try. We  were  advancing  money  to  England.  We  were  giving 
the  British  the  privilege  of  buying  our  materials  at  our  own 
fixed  prices — serving  them  as  we  served  ourselves.  But  Eng- 
land was  not,  at  that  time,  selling  to  us  at  her  own  controlled 
prices.  Indeed,  England  was  not  then  controlling  many  indus- 
trial prices  at  all.  The  English  averred  as  much,  protesting  that 
for  most  English  products  we  had  as  fair  a  chance  to  bid  as  any- 
one else.  Mr.  Baruch  then  served  what  amounted  to  an  ulti- 
matum to  the  British  Government.  England,  if  she  expected 
further  financial  aid  from  the  United  States,  must  not  only 
serve  us  with  her  own  controlled  prices,  but  she  must  also  take 
under  governmental  control  certain  British  commodities  then 
not  so  controlled  and  fix  prices  for  those  commodities. 

Among  the  commodities  which  we  asserted  our  right  to 
buy  at  a  controlled  price,  paying  no  more  and  no  less  than 
England  herself  paid,  was  jute.  England  had  a  ready  answer: 
jute  was  controlled  by  the  Indian  Government,  which,  while 
it  was  a  part  of  Great  Britain,  nevertheless  was  supreme  in 
such  affairs.  England,  apparently,  could  not  do  anything  to 
make  India  reduce  the  price  of  jute — although,  of  course,  jute 


148  THE  GIANT  HAND 

was  sold  to  England  at  a  nice,  natural,  normal,  mother- 
country  price. 

"All  right,"  said  Mr.  Baruch,  in  effect.  "Sorry.  Didn't 
know  that.  We  have  been  executing  British  Treasury  orders  for 
silver  for  India,  assuming  that  the  Indian  Government  was 
under  the  British  Imperial  Government,  and  that  the  British 
Treasury  was  acting  for  the  whole  Empire.  If  the  Indian 
Government  is  not  under  the  British  Imperial  Government  in 
these  affairs,  then  we  will  no  longer  execute  British  Treasury 
orders  for  silver  for  India.  We  will  simply  assail  Indian 
rupees  in  the  open  market  and  buy  our  jute  in  depreciated 
currency." 

Mr.  Chamberlain  was  properly  worried. 

"Why,"  he  said,  "that  would  close  the  stock  exchanges  in 
Calcutta  and  Bombay." 

"Let  them  close,"  answered  Mr.  Baruch. 

"Wait  a  minute,"  said  Mr.  Chamberlain.  "Wait  forty- 
eight  hours." 

Mr.  Baruch  waited  forty-eight  hours.  Then  he  was  told  that 
the  British  Cabinet  had  reconsidered  its  action,  had  revoked 
its  previous  decision,  and  had  forced  into  its  own  hands  the 
control  of  the  price  of  jute.  It  asked  the  United  States  to  send 
a  representative  to  sit  upon  a  special  board  to  determine  what 
the  international  price  of  jute  should  be. 

As  the  result  of  Mr.  Summers's  efforts  in  London  an  interna- 
tional executive  in  tin  was  established.  Also  an  arrangement 
was  struck  by  which  the  English  Government  sold  wool  to  our 
Army  at  the  same  price  as  to  the  British  Army;  in  other  words, 
at  the  British  military  price  instead  of  at  the  British  civilian 
prices — a  considerable  difference.  On  one  wool  contract,  which 
at  the  time  was  about  to  be  closed,  the  new  price  saved  the 
United  States  $45,000,000. 

It  is  easy  to  say  that  Mr.  Summers  established  an  interna- 
tional executive  in  tin.  It  was  quite  another  thing  actually  to 
establish  it,  for  the  difficulties  were  well-nigh  insuperable. 
Briefly,  the  situation  in  England  was  this:  The  British  War 
Government  was  a  coalition  government,  with  all  important 


Photo  from  Quartermaster  Department 

MAKING  ROPE  FOR  ARMY 


Photo   from   Bartlett-Hayward    Company 

SHELL  STEEL  BEING  CUT  INTO  BILLETS 


FOREIGN  ACTIVITIES  149 

political  elements  represented  in  it,  commercial  interests,  how- 
ever, holding  the  greatest  power.  Mr.  Summers  had  to  batter 
his  way  through  business  interests,  through  rank  after  rank  of 
money-making  corporations,  in  order  to  reach  the  political 
heads  of  the  Government.  When  his  representations  forwarded 
through  diplomatic  channels  had  availed  nothing,  Mr.  Sum- 
mers swung  an  ax  with  plenty  of  war  industries  board  muscle 
behind  it :  and  then  he  got  results. 

English  war  industry  was  at  that  time  under  the  direction 
of  various  committees.  The  committees  were  interested  prima- 
rily in  making  production  come  up  to  war  demand,  with  noth- 
ing said  about  prices.  At  least  there  was  no  such  price  control 
as  we  knew  in  this  country.  And  why  should  there  have  been? 
The  British  committees  were  not  primarily  committees  of  the 
British  public  as  represented  by  its  Government.  They  were 
essentially  committees  of  British  industry  itself.  Our  War 
Industries  Board  was  never  guilty  of  that  heresy.  Meticu- 
lously it  adhered  to  the  policy  that  the  men  whom  it  invested 
with  control  over  industry  should  not  be  financially  interested 
in  the  industrial  branches  which  they  controlled.  It  was  just 
the  other  way  with  the  British  committees.  They  represented 
the  British  industries  themselves.  And  when  we,  as  a  large 
customer  of  those  industries,  asked  the  pseudo-governmental 
committees  to  fix  prices — hence  to  reduce  and  limit  their  own 
profits — naturally  they  refused. 

Their  refusal  had  not  been  unanticipated  by  the  War  Indus- 
tries Board,  whose  Foreign  Mission  had  instructions  what  to 
do  in  just  that  circumstance.  The  British  Government  had 
expected  that  the  industrial  cooperation  to  be  afforded  by  our 
Foreign  Mission  would  take  the  form  of  participation  in  the 
deliberations  of  the  British  committees.  This  very  thing  the 
members  of  the  Mission  refused  to  do.  They  asserted  for  them- 
selves a  governmental  or  ambassadorial  status  in  England  and 
declined  to  meet  with  bodies  that  were  not  governmental,  but 
industrial.  They  appealed  to  the  British  Cabinet  to  bring  these 
committees  under  governmental  control  and  make  them  repre- 
sent, not  a  collection  of  special  interests,  but  the  common  weal. 


150  THE  GIANT  HAND 

It  was  an  appeal  which  Downing  Street  was  in  no  position  to 
deny.  The  Government  acted  and  drew  the  committees  in 
under  the  jurisdiction  of  the  Ministry.  Mr.  J.  Austen  Chamber- 
lain was  then  a  minister  without  portfolio.  To  him  was 
assigned  direction  over  the  industrial  committees.  Thereupon 
the  American  representatives  consented  to  join  the  commit- 
tees, and  thereafter  the  Foreign  Mission  attacked  the  interna- 
tional industrial  problems  through  the  committees. 

One  of  these  problems  was  the  supply  of  tin.  Here  our  peo- 
ple trod  on  thin  ice,  for  tin  is  a  commodity  in  which  British 
interests  have  what  approaches  a  world  monopoly.  Tin  is  about 
the  only  important  metal  of  which  the  United  States  has  no 
adequate  native  supply.  The  great  tin  mines  of  the  world  are 
in  Cornwall,  in  Bolivia,  and  in  the  East  Indies.  The  British, 
of  course,  own  the  Cornish  deposits,  the  British  tin  concessions 
in  the  East  Indies  are  great  ones,  and  British  concerns  are 
heavily  interested  in  Bolivian  tin  mines.  We  had  to  have  tin 
for  numerous  war  purposes — mainly  for  the  plating  of  cans 
in  which  to  pack  food  for  the  A.  E.  F.  Hence  we  were  a  heavy 
buyer  of  British  tin,  if  not  the  heaviest  buyer;  and  for  us 
coolly  to  propose  to  the  British  the  formation  of  an  interna- 
tional executive  to  control  the  price  of  this  essentially  British 
product,  was  to  hit  certain  powerful  British  interests  where 
they  were  most  exposed. 

Yet  for  some  time  the  British  Government,  taking  the 
larger  view  of  the  situation,  had  desired  the  control  of  tin 
and  also  that  of  rubber,  another  tremendous  British  enter- 
prise, but  had  never  quite  dared  to  draw  the  issue  with  the  two 
industries.  They  were  almost  impregnably  entrenched  in  their 
position  in  the  British  Board  of  Trade,  which  ranks  virtually 
as  a  department  of  the  British  Government.  The  war  supply 
of  British  tin  and  rubber  was  in  charge  of  a  committee  of  the 
Board  of  Trade,  and  this  committee  was  really  a  committee  of 
the  two  industries.  They  were  prepared  to  give  the  unsup- 
ported British  Ministry  a  hard  battle  at  any  time. 

The  American  position  gave  the  coalition  Government  a 
weapon  to  use  against  these  vested  interests.  Before  our  repre- 


FOREIGN  ACTIVITIES  151 

sentatives  were  to  be  permitted  to  sit  on  the  tin  and  rubber 
committee,  the  United  States  demanded,  first,  that  tin  and 
rubber  be  separated  and  considered  as  individual  entities; 
and  secondly,  that  both  commodities  be  brought  under  full 
governmental  control.  Even  had  the  British  Government 
wished  to  dispute  this  demand,  which  it  did  not,  it  would 
scarcely  have  dared  do  so ;  because  America  was  the  source  of  a 
few  international  war  commodities  herself — steel  and  copper 
and  others — and  was  in  a  position  to  retaliate  if  British  prices 
were  not  held  within  reason.  Thus  Mr.  Summers  was  able  to 
force  a  divorce  between  British  rubber  and  British  tin,  and  to 
bring  British  tin  under  control. 

This  he  could  not  have  done  without  the  complete  backing 
of  the  Government  in  Washington.  The  President  and  Secre- 
tary McAdoo  of  the  Treasury  stood  stanchly  behind  Mr. 
Baruch  in  his  foreign  negotiations,  and  he  in  turn  supported 
Mr.  Summers  and  the  Foreign  Mission  without  reservation. 
The  British  Government  had  no  appeal  to  higher  authority; 
and  as  for  the  tin  interests,  they  could  hardly  go  to  the  British 
public  and  protest  in  effect:  "Look  here;  Uncle  Sam  is  making 
us  do  without  our  profits  in  order  to  establish  the  International 
Tin  Executive,  which  will  indeed  save  money  and  keep  down 
taxes,  but  which  will  keep  us  from  making  as  much  money  as 
we  expected."  Hardly. 

The  War  Industries  Board  did  not  make  contracts  or  pur- 
chases anywhere,  but  in  the  tin  development  it  became  neces- 
sary for  it  to  assume  charge  of  these  concrete  details.  For  our 
participation  in  the  tin  pool  we  needed  ready  cash,  and  plenty 
of  it.  The  Board  itself  had  no  funds  for  such  purposes,  and 
none  of  the  purchasing  bureaus  in  Washington  had  money  to 
be  spared  from  other  projects.  It  looked  as  if  a  special  act  of 
Congress  appropriating  the  money  would  be  necessary.  But  the 
War  Industries  Board  was  an  impatient  crew.  It  hated  to  go 
around  a  field  if  it  could  cut  through;  and  it  now  arranged 
with  the  United  States  Steel  Products  Company  to  handle  the 
tin  deal.  That  concern  put  up  several  million  dollars,  bought 
all  the  tin  allocated  to  America  by  the  Executive,  distributed 


152  THE  GIANT  HAND 

it  according  to  the  dictates  of  the  Board,  and  charged  not  a 
penny  for  commissions  or  profits.  The  American  consumers 
secured  it  at  the  international  price. 

The  establishment  of  international  executives  was  by  no 
means  all  of  the  accomplishment  of  the  Foreign  Mission.  In- 
deed, it  did  many  things  which  found  no  place  in  official 
reports,  which  resulted  in  the  establishment  of  no  great  execu- 
tive bodies,  which  went  unheralded  then  and  thereafter,  but 
which  were  often  of  far-reaching  importance.  The  Mission 
was  the  reconnoitering  patrol  of  behind-the-line  industrial 
strategy;  and  because  it  was  a  small,  compact  body  of  experts, 
backed  by  a  tremendous  power,  it  was  able  to  work  wonders 
with  great  speed. 

The  Foreign  Mission  consisted  of  a  dozen  experts  and  two 
secretaries,  all  under  the  direction  of  Mr.  Summers.  Of  these 
twelve,  Mr.  Chandler  P.  Anderson  should  first  be  mentioned. 
Mr.  Summers  described  him  as  "both  the  motive  power  and  the 
lubricant  which  kept  the  Foreign  Mission  wheels  turning." 
Having  been  a  counselor  of  the  State  Department  and  an 
arbitrator  in  several  international  questions,  and  possessing  a 
wide  acquaintance  among  both  French  and  British  government 
officials,  he  brought  to  the  Mission  an  exceedingly  useful 
knowledge  of  international  law,  procedure,  and  methods.  Mr. 
George  N.  Armsby,  a  member  of  the  Priorities  Committee  of 
the  War  Industries  Board,  and  chief  of  its  Tin  Section,  had 
charge  of  the  negotiations  leading  to  the  formation  of  the 
International  Tin  Executive.  Mr.  Albert  M.  Patterson,  presi- 
dent of  the  Textile  Alliance  and  chief  of  the  Board's  Foreign 
Wool  Section,  was  in  command  of  the  Mission's  dealings  in 
textiles.  Mr.  Paul  Mackall,  of  the  Bethlehem  Steel  Company, 
was  the  steel  expert,  and  Mr.  Henry  W.  Boyd,  president  of  the 
Armour  Leather  Company,  the  hides  and  leather  expert.  Mr. 
Whiteside,  president  of  the  National  Credit  Company,  was 
the  group's  statistician,  and  Mr.  Edward  A.  Pierce,  of  A.  A. 
Housman  &  Company,  its  business  manager.  Mr.  Ordway,  of 
the  Crane-Ordway  Company  of  Minneapolis,  represented  the 
Mission  on  the  Interallied  Munitions  Council.  Mr.  John 


Photo  by   G  ess  ford 


L.  L.  SUMMERS 


FOREIGN  ACTIVITIES  153 

Hughes,  vice-president  of  the  American  Sheet  and  Tin  Plate 
Company,  aided  Mr.  Armsby  in  his  campaign  for  the  control 
of  tin.  Mr.  Nixon  was  associated  with  Mr.  Patterson  in  his 
work  in  textiles;  and  Dr.  Lincoln  Hutchinson,  of  Leland 
Stanford  Junior  University,  looked  after  the  Mission's  inter- 
ests in  nonferrous  metals.  These  men  sailed  for  Europe  in 
July,  1918.  After  the  formation  of  the  Tin  Executive,  Messrs. 
Armsby  and  Hughes  returned  to  the  United  States,  but  the 
rest  remained  abroad  until  after  the  armistice. 

After  the  Nitrates  and  Tin  Executives  had  demonstrated 
their  usefulness,  the  British  Government  took  kindly  to  the 
general  application  of  the  principle  of  international  executives, 
wherever  it  was  of  advantage  to  have  them  exist.  However, 
the  British  assumed  that  all  the  executives  would  be  set  up 
with  London  as  headquarters  and  that  all  of  them  would  have 
English  directors  at  the  head.  This  was  an  untenable  posi- 
tion, but  it  required  tact  and  courtesy  on  the  part  of  the  Mis- 
sion, combined  with  firmness,  to  demonstrate  it.  For  instance, 
it  was  desirable  to  form  an  international  executive  in  hides 
and  leather;  and  there  was  never  any  question  in  the  minds  of 
Mr.  Summers  and  his;  associates  that,  when  formed,  this 
executive  should  be  run  from  Washington,  because  the  greater 
part  of  the  hides  and  leather  to  be  controlled  by  it  would 
come  from  America.  The  British  Government  finally  agreed 
to  this  plan. 

At  the  time  of  the  armistice  the  two  governments  were  con- 
templating the  formation  of  international  executives  in  tung- 
sten, manganese,  platinum,  and  flaxseed. 

Steel,  its  allocation  and  use,  was  another  subject  for  inter- 
national consideration,  the  steel  questions  being  decided  by 
an  international  steel  committee.  It  was  upon  Mr.  Summers's 
insistence  that  an  American  was  made  chairman  of  this  com- 
mittee. This  important  but  amusing  episode  occurred,  in  Mr. 
Summers's  own  words,  as  follows: 

"We  had  not  been  invited  into  conferences  in  regard  to  the 
chairmanships  of  the  several  committees  then  formed  and 
sitting  in  London.  They  were  not  executive  committees,  but 


154  THE  GIANT  HAND 

general  committees  under  the  Interallied  Munitions  Council. 
We  felt  some  delicacy  about  raising  the  question  of  chairman- 
ships and  waited  to  be  invited  to  attend  conferences  to  consider 
it.  Such  conferences,  however,  did  not  take  place,  and  yet  we 
discovered  that  the  committees  were  being  organized. 

"There  was  some  delay  while  we  were  awaiting  the  Italian 
representatives  who  were  to  sit  on  the  Steel  Committee,  and 
business  with  that  committee  proceeded  informally  under  a 
temporary  chairman.  The  day  the  permanent  organization  for 
the  committee  was  to  be  adopted — there  not  yet  having  been 
any  conferences  in  regard  to  the  chairmanship — I  simply  pre- 
empted the  chair  at  the  meeting  and  stated  that  it  had  been 
called  for  the  purpose  of  selecting  a  permanent  chairman  and 
perfecting  a  permanent  organization;  that  inasmuch  as  Amer- 
ica was  supplying  a  greater  amount  of  steel  than  the  entire 
production  of  the  rest  of  the  Allies,  it  seemed  only  proper  to 
suggest  that  an  American  chairman  be  appointed;  and  that, 
if  there  was  no  objection,  I  would  nominate  Mr.  Paul  Mackall 
as  permanent  chairman.  This  was  so  unexpected,  and  it  so 
upset  all  arrangements,  that  no  effective  opposition  existed. 
The  Italians  and  the  French  were  glad  to  see  an  American 
chairman.  I  then  stated  that,  if  there  were  no  objections,  Mr. 
Mackall  would  be  declared  permanent  chairman;  and,  there 
being  no  objection,  I  announced  that  Mr.  Mackall  was  perma- 
nent chairman,  and  would  he  kindly  take  the  chair;  and  then 
I  retired. 

"That  evening  Mr.  Winston  Churchill's  private  secretary 
called  on  me  and  asked  that  we  meet  and  discuss  the  question 
of  permanent  chairmen  for  all  committees  to  be  formed  under 
the  Munitions  Council,  saying  that  they  would  be  very  glad  to 
cooperate  with  the  Americans  in  selecting  chairmen." 

The  question  of  the  chairmanship  of  the  International  Steel 
Committee  was  no  light  one  for  us.  In  America  the  steel  indus- 
try was  completely  under  federal  control.  We  allocated  steel 
to  the  essential  war  needs  and  deprived  our  nonessential 
industries  of  it,  but  we  had  no  adequate  measure  of  the  extent 
to  which  the  foreign  governments  were  depriving  their  non- 


FOREIGN  ACTIVITIES  155 

essential  industries  of  steel.  Knowing  how  easy  it  would  be 
for  England  to  utilize  her  purchases  of  American  steel  for  war 
and  at  the  same  time  to  allow  her  own  steel  to  flow  into  com- 
merce in  anticipation  of  the  post-bellum  trade  revival,  the 
Foreign  Mission  carefully  studied  the  English  production  of 
steel. 

Mr.  Summers  and  Mr.  Mackall  visited  the  various  steel 
works  in  both  France  and  England.  They  found  much  opposi- 
tion at  first  to  their  getting  a  detailed  statement  of  where  and 
how  the  steel  was  being  allocated,  but  they  finally  obtained 
the  facts  they  sought.  Incidentally  they  uncovered  an  inter- 
esting transaction.  The  British  had  contracted  to  supply  the 
Italians  with  100,000  tons  of  steel.  When  they  had  delivered 
a  few  thousand  tons  on  this  order,  they  notified  the  Italians 
that  England  would  expect  Italy  to  replace  this  quantity  of 
steel  with  American  steel.  Had  the  transaction  gone  through 
as  the  British  expected,  Italy  would  have  placed  an  order  in 
the  United  States  for  100,000  tons  of  steel  to  be  shipped  to 
England ;  and  the  United  States  would  have  had  no  knowledge 
of  what  the  original  100,000  tons  of  steel  supplied  to  Italy  by 
England  had  been  used  for.  In  the  light  of  these  facts,  but 
without  raising  any  question  as  to  whether  the  Italians  had 
used  the  steel  for  war  purposes,  the  War  Industries  Board 
refused  the  Italian  order  on  the  ground  that  we  had  no  knowl- 
edge to  what  use  the  steel  had  been  put  and  had  not  been  a 
party  to  the  original  contract. 

The  War  Industries  Board  did  not  propose  to  starve  our 
own  steel-using  nonwar  industries  with  one  hand,  while  scat- 
tering American  steel  to  the  ends  of  the  earth  with  the  other, 
without  knowing  something  about  what  was  happening  to  the 
export  steel. 

The  great  Allied  Offensive  started  in  July,  1918,  and  devel- 
oped in  extent,  power,  and  success  far  beyond  the  original 
anticipations.  By  August  it  was  evident  that  the  combined  use 
of  French  shell  by  both  the  American  and  French  armies  was 
dangerously  depleting  the  French  ammunition  reserves.  The 
chief  shortage  was  in  75-millimeter  shell.  When  the  drive 


156  THE  GIANT  HAND 

started  there  had  been  30,000,000  shell  of  this  size  in  reserve. 
When  the  number  had  dwindled  to  13,000,000,  the  French 
Minister  of  Munitions  called  for  help.  Mr.  Summers  and  Mr. 
Mackall  investigated  at  once  and  ascertained  that,  in  the  face 
of  the  shortage,  the  French  shell  plants  were  working  only 
part  time.  The  reason  was  that  they  had  run  out  of  shell  steel. 
Mr.  Baruch  was  advised  of  the  extreme  urgency  of  the  situa- 
tion, and  he  had  Mr.  Replogle,  of  the  Steel  Division,  issue 
special  instructions  to  the  Lackawanna  and  Carnegie  Steel 
companies  to  put  on  75-millimeter  steel  in  quantity.  The  effect 
was  immediate.  Within  eighteen  days — even  before  all  the 
formalities  of  making  out  the  order  in  Paris  were  completed — 
the  American  75-millimeter  shell  steel  began  arriving  in 
France;  and  the  French  machining  factories  stepped  up  to 
twenty-four  hours'  work  a  day.  Not  only  were  the  French 
factories  thereafter  able  to  keep  pace  with  a  consumption  of 
shell  greater  than  any  known  before  in  the  World  War,  but 
they  actually  succeeded,  in  those  historic  six  weeks,  in  building 
the  75-millimeter  shell  reserves  up  to  19,000,000 !  Such  was  the 
value  of  the  American  Foreign  Mission,  representing  a  flexible 
control  at  home  that  could  instantly  concentrate  upon  the 
manufacture  of  some  important  war  commodity. 

Then  there  was  the  episode  of  the  mules  and  the  ammonia — 
strange  association,  but  one  which  again  demonstrated  the  use- 
fulness of  the  War  Industries  Board  and  its  Foreign  Mission. 
The  story  begins  with  the  roads  of  France — those  beyond  the 
railheads.  They  were  so  badly  cut  up  by  the  heavy  army  trucks 
that  it  became  impossible  to  move  artillery  on  them  with  me- 
chanical power.  The  A.  E.  F.  had  to  have  more  mules  and 
horses  to  move  artillery  and  its  supplies.  We  were  sending  all 
we  could  transport,  but  they  were  not  enough.  The  agents  of 
the  A.  E.  F.  scoured  neutral  Europe  for  animals.  They  uncov- 
ered a  supply  of  mules  in  Spain,  but  Spain  would  not  let  them 
go.  Spain  needed  them  herself.  But  Spain  also  had  a  profitable 
munitions  industry,  which  was  languishing  for  ammonium 
sulphate.  This  it  could  not  buy,  because  ammonium  sulphate 
is  used  in  large  quantities  in  the  manufacture  of  amatol,  the 


Photo  from  Sailers   Steel    Company 

SHELL  INGOTS  FRESH  FROM  POURING  FLOOR 


Photo  from  Spencer  Engineering   Company 

BORING  SHELL  FOR  75'S 


Photo  from   Curtiss  Aeroplane  6?  Motor  Corporation 

ASSEMBLING  FLYING  BOATS  FOR  NAVY 


Photo  from  Quartermaster  Department 

CANNING  VEGETABLES  IN  TINS  FOR  ARMY 


FOREIGN  ACTIVITIES  157 

high  explosive.  To  conserve  our  own  supply  of  ammonia,  we 
had  embargoed  its  export  and  had  even  shut  off  its  use  by  non- 
war  industries.  Here,  then,  was  a  chance.  Spain  needed  mules 
more  than  gold,  but  ammonium  sulphate  more  than  either. 

The  authorities  of  the  Navy  and  of  the  Department  of 
Agriculture  (for  ammonia  is  a  fertilizer,  too)  and  of  the  Food 
Administration  all  set  their  faces  against  any  proposition  to 
lift  the  embargo  and  trade  American  ammonia  for  Spanish 
mules.  In  vain  the  War  Industries  Board  argued.  Each  of 
these  authorities  saw  ammonia  as  his  especial  problem,  and 
not  as  a  part  of  the  whole  problem.  But  the  War  Depart- 
ment knew  that  the  A.  E.  F.  would  be  greatly  handicapped  if 
the  mobility  of  the  artillery  were  impaired. 

"Baruch,"  said  the  army  heads,  "unless  we  have  those 
mules,  the  American  Army  in  France  will  cease  to  move." 

"All  right,"  answered  Mr.  Baruch,  "you  get  your  mules." 

And  get  them  they  did.  In  the  face  of  a  united  protest,  he 
scaled  down  the  essential  domestic  demands  for  ammonium 
sulphate,  exported  quantities  of  it  to  Spain,  and  bought  mules 
there;  and  the  artillery  wheels  turned. 

That  could  not  and  would  not  have  been  done,  had  there  not 
been  a  Foreign  Mission  to  see  and  report.  The  chairman  of  the 
War  Industries  Board  never  refused  any  demand  which  came 
to  him  from  the  Foreign  Mission.  Having  sent  this  Mission  to 
be  his  eyes  and  ears  abroad,  Mr.  Baruch  heeded  the  informa- 
tion it  brought  him.  Incidentally,  it  should  be  added  that  Mr. 
Baruch  not  only  officially,  but  literally,  "sent"  the  Foreign 
Mission  abroad,  paying  its  expenses  (some  $68,000)  out  of 
his  own  pocket. 

During  the  war  the  prices  of  leather  reached  a  height  never 
before  imagined.  When  prices  were  at  their  highest,  the  Ameri- 
can Army  placed  an  order  in  England  for  2,000,000  pairs  of 
shoes  for  the  A.  E.  F.  It  did  this  because,  while  the  English 
price  was  higher  than  the  American,  the  A.  E.  F.  needed  the 
shoes  in  a  hurry,  and  the  quartermaster  officers  abroad  believed 
that  the  English  factories  could  deliver  them  in  the  shortest 
possible  time.  Soon  it  became  evident  to  the  American  mem- 


158  THE  GIANT  HAND 

bers  of  the  International  Hides  and  Leather  Committee  that 
the  English  shoe  industry  was  having  no  easy  time  with  the 
A.  E.  F.  order.  It  kept  asking  for  undue  allocations  of  leather 
and  for  certain  other  preferences  in  treatment,  and  the  Foreign 
Mission  decided  to  investigate.  It  found  that  the  British  shoe 
factories  could  not  possibly  deliver  the  A.  E.  F.  shoes  in  season 
and  that  the  A.  E.  F.  could  save  time  and  money  and  secure 
a  superior  product  by  ordering  the  shoes  from  America.  Mr. 
Boyd  crossed  the  Channel  to  France  and  proved  this  conten- 
tion to  the  A.  E.  F.'s  purchasing  agency.  The  purchasing  offi- 
cers accepted  the  analysis  and  gave  Mr.  Boyd  power  to  cancel 
the  British  order  in  writing.  He  waited  until  the  British  shoe- 
makers again  raised  the  question  of  special  consideration  by  the 
Hides  and  Leather  Committee,  and  then  stated  that  he  recog- 
nized how  much  England  was  sacrificing  to  handle  this  order; 
and  that,  because  it  was  proving  to  be  so  great  a  hardship  upon 
the  industry,  he  had  been  able  to  get  the  American  Army  to 
cancel  the  order.  And  he  handed  the  cancellation  to  the  chair- 
man of  the  committee. 

It  was  also  due  to  the  Foreign  Mission — and,  specifically,  to 
Mr.  Legge  and  Mr.  Summers — that  scarcely  had  the  armistice 
been  signed  when  those  ears  and  eyes  of  the  War  Industries 
Board  were  rapidly  going  through  the  devastated  areas,  some- 
times even  ahead  of  the  retreating  Germans,  in  order  to  obtain 
an  accurate  impression  of  the  actual  conditions.  This  was  done 
in  recognition  of  the  fact  that  demands  would  soon  be  made 
upon  America  for  materials  to  be  used  in  reconstruction.  To  get 
a  real  idea  of  those  demands,  the  flying  squadron  of  the  For- 
eign Mission,  in  automobiles,  covered  Belgium  and  Alsace- 
Lorraine,  as  well  as  the  Rhine  provinces;  and  the  representa- 
tives were  able  to  give  to  Colonel  E.  M.  House  some  accurate 
statements  about  the  situation,  statements  which  led  Colonel 
House  to  take  up  with  the  President  the  question  of  forming 
an  organization  to  estimate  the  damage  done  to  the  invaded 
regions.  The  President  authorized  this  plan;  General  Pershing 
appointed  General  McKinstry  to  take  charge  of  it ;  and  a  repre- 
sentative of  the  War  Industries  Board  served  with  General 


FOREIGN  ACTIVITIES  159 

McKinstry  in  estimating  the  total  damage  in  the  devastated 
regions. 

Such  was  the  work  of  the  Foreign  Mission.  That  our  great 
industrial  control  organization  would  ever  have  power  beyond 
the  borders  of  its  own  country  was  something  not  to  be  fore- 
seen; but,  even  so,  the  armistice  found  the  War  Industries 
Board  activating  a  movement  which  was  rapidly  bringing 
about  the  unified  control  of  industrial  strategy  behind  the  lines. 
The  temptation  recurs  to  compare  this  movement  with  the  one 
which  led  to  the  supreme  command  of  the  Interallied  Armies. 
Mr.  Baruch  was  in  no  sense  supreme  commander  of  the  inter- 
national industrial  situation — not  the  Foch  of  war  industry. 
Nevertheless,  through  his  Foreign  Mission  and  backed  by  the 
powerful  position  of  the  United  States,  he  managed  to  impose 
his  will  upon  many  foreign  industries  in  affairs  of  the  great- 
est moment — to  bring  them  within  the  control  of  their  own 
governments,  and  then  to  swing  the  governments  into  a  co- 
ordination of  effort  which  avoided  waste  of  energy,  made  for 
speed,  saved  money,  and  proved  its  effectiveness  as  a  war 
measure. 


CHAPTER  XI 
ORGANIZATION  AND  PERSONNEL 

THIS  account  has  not  thus  far  attempted  to  give  a  pic- 
ture of  the  whole  War  Industries  Board.  It  has  con- 
tented itself  with  selecting  certain  of  the  Board's 
activities  which,  because  of  their  obvious  importance  or  novelty 
or  picturesqueness  in  government,  have  been  deemed  to  be  of 
general  interest;  but  in  so  doing  it  has  passed  by  numerous 
offices  and  branches  and  divisions  which  were  necessary  to  the 
smooth  and  ordered  conduct  of  the  Board's  work,  essential  to 
its  organization,  but  the  interests  of  which  lay  in  administra- 
tive and  routine  provinces.  Yet  it  is  unfair  to  dismiss  these 
supporting  organizations  without  mention,  merely  because  they 
were  not  always  on  the  battle  front  of  war  industry.  And  if  the 
preceding  pages  have  succeeded  in  conveying  a  just  estimate 
of  the  eminence  of  the  War  Industries  Board  in  the  War 
Government,  it  is  hoped  that  they  will  lend  interest  to  what 
now  follows. 

However,  it  is  impossible  to  give  a  complete  picture  of  the 
War  Industries  Board  and  date  the  picture.  One  can  not  truth- 
fully present  a  list  of  divisions,  branches,  and  officials  and 
say,  "That  was  the  War  Industries  Board."  This  emergency 
organization  was  constantly  changing  as  its  experience  grew 
and  its  work  expanded.  Some  officials  left  it  for  new  fields; 
others  took  their  places.  Whole  divisions  were  found  to  be  out 
of  key  with  the  general  scheme,  and  were  lopped  off.  At  one 
time  there  was  a  Finished  Products  Division,  the  duties  of 
which,  as  its  name  indicates,  were  multifold.  At  that  time  the 
pioneer  commodity  sections  dealt  almost  exclusively  in  raw 
materials.  Later,  however,  the  shortages  in  finished  products 
asserted  their  need  for  separate  consideration;  and  one  after 


Photo  from   Sperry   Gyroscope   Company 

PRECISION  MACHINERY  FOR  MAKING  NAVY 
GYRO-COMPASSES 


Photo  from  Air  Service 

THOMAS-MORSE  FUSELAGES  READY  TO  BE  COVERED 


ORGANIZATION  AND  PERSONNEL          161 

another  the  Finished  Products  Division  passed  over  its  specific 
duties  to  freshly  created,  small,  compact,  expert,  sharp-cutting 
commodity  sections. 

There  was  an  even  profounder  change  in  the  organization  of 
the  Board.  It  will  be  remembered  that  for  several  months  the 
Board  existed  only  as  an  advisory  body,  virtually  subordinate 
to  the  advisory  Council  of  National  Defense.  Then  descended 
upon  it  the  mantle  of  supreme  power,  and  it  became  a  new 
force  in  Government.  The  War  Industries  Board  of  1917  was 
not  that  of  the  final  months  of  the  war,  although  its  personnel 
was  largely  the  same.  Yet  this  earlier  period  is  not  to  be  dis- 
regarded, for  then  was  laid  the  foundation  of  much  that  was  to 
follow.  Obviously,  the  attempt  here  must  be  to  present  a  com- 
posite which  will  represent  the  War  Industries  Board  through- 
out its  existence.  The  tendency,  however,  will  be  to  show  the 
organization  as  it  existed  during  the  Board's  last  days. 

The  general  plan  of  the  Board,  then,  placed  Mr.  Baruch 
at  the  top  of  it,  delegating  presidential  powers,  according  to  his 
plan  of  decentralization,  to  those  men  whom  he  gathered 
around  him  to  carry  on  the  work.  Mr.  Baruch  was  aided  by 
four  assistants:  Mr.  Herbert  B.  Swope  (who  was  also  an 
associate  member  of  the  Board),  Mr.  A.  C.  Ritchie  (who 
acted  as  the  Board's  general  counsel),  Mr.  Clarence  Dillon, 
and  Mr.  Harrison  Williams.  Next  in  the  organization  chain 
came  Judge  E.  B.  Parker,  the  priorities  commissioner,  heading 
both  the  Priorities  Commission  and  the  Priorities  Board.  Mr. 
G.  N.  Peek,  the  commissioner  of  finished  products,  held  in  his 
executive  domain  the  Textile  and  Rubber  Divisions  (Mr. 
John  W.  Scott  was  director  of  both)  and  the  Facilities  Divi- 
sion (headed  by  Mr.  Samuel  P.  Bush).  Mr.  Peek  had  three 
assistant  commissioners,  Messrs.  W.  M.  Ritter,  E.  L.  Craw- 
ford, and  W.  Robbins,  each  in  charge  of  questions  relating  to 
various  finished  products,  in  the  aggregate  ranging  from  trucks 
and  automobiles  to  tobacco.  On  an  official  plane  with  Mr. 
Baruch,  or  under  his  orders,  as  you  please,  came  Mr.  R.  S. 
Brookings  and  his  Price  Fixing  Committee.  Rear  Admiral 
F.  F.  Fletcher  represented  the  Navy  upon  the  Board,  and 


162  THE  GIANT  HAND 

Major  General  George  W.  Goethals  the  Army.  Their  posi- 
tions were  advisory:  neither  had  direct  charge  of  any  execu- 
tive function  of  the  War  Industries  Board.  Mr.  Baruch  re- 
ceived direct  reports  from  and  kept  in  close  contact  with  the 
steel  industry  through  Mr.  J.  L.  Replogle,  head  of  the  Steel 
Division;  knew  labor  conditions  through  Mr.  Hugh  Frayne; 
and  kept  an  eye  on  explosives  and  chemicals  through  Mr.  L.  L. 
Summers.  He  kept  in  touch  with  the  work  of  the  Conservation 
Division  through  Mr.  A.  W.  Shaw  and  with  that  of  the  Divi- 
sion of  Planning  and  Statistics  through  Mr.  E.  F.  Gay, 
watched  the  Board's  regional  advisers  through  the  eyes  of  Mr. 
Charles  A.  Otis,  and,  finally,  maintained  a  general  supervision 
over  everything  he  could  not  see  for  himself  through  the 
catholic  vision  of  his  vice  chairman,  Mr.  Alexander  Legge. 

These  names  were  names  well  known  to  American  industry 
during  the  war,  if  they  did  not  become  well  known  to  the 
American  public.  Indeed,  some  may  wonder  why  Mr.  Baruch, 
with  all  power  behind  him  and  all  industrial  and  business  life 
upon  which  to  draw,  did  not  select  and  place  at  the  heads  of 
the  chief  activities  of  the  Board  more  men  of  national  reputa- 
tion for  great  things  accomplished.  The  answer,  of  course,  lay 
in  Baruch  himself,  in  his  broad  acquaintance  among  the  men 
of  industry,  in  his  reliance  upon  his  own  judgments — in  short, 
in  his  own  characteristic  way  of  doing  things.  Perhaps  he  might 
have  done  differently  and  fared  as  well,  but  no  one  who  knows 
the  record  will  quarrel  with  his  methods.  For  the  most  part  he 
picked  up-and-coming  men,  men  who  were  doing  things  in  the 
world  but  whose  careers  and  ambitions  lay  ahead  of  them 
rather  than  behind — men  of  the  managing,  planning,  construc- 
tive type.  You  may  be  sure  that  Baruch  tried  no  experiments 
in  those  ticklish  days.  He  knew  his  people  and  was  sure  of 
them,  and  he  made  no  mistakes. 

Consider  Alexander  Legge  as  an  example.  He  filled  the 
position  next  in  importance  to  the  chairmanship  itself.  Yet 
Legge,  who  was  an  active  officer  of  the  International  Har- 
vester Company,  had  no  more  than  a  local  reputation  out- 
side his  own  branch  of  industry.  Baruch  knew  him,  and  all 


ORGANIZATION  AND  PERSONNEL          163 

American  industry  came  to  know  him;  and  the  statement  is 
ventured  here  that  if  the  Board's  chairman  had  raked  the 
country  from  Maine  to  California,  he  could  not  have  made  a 
happier  choice.  Legge  possessed  evenness  of  mind  in  combina- 
tion with  a  tremendous  store  of  energy  and  initiative.  He  could 
plan  or  execute  his  chief's  plans  equally  well.  A  tower  of 
strength  in  the  War  Industries  Board — that  was  Legge. 

These  men  came  to  Washington  at  the  chairman's  call,  and 
for  their  dollar  a  year  considered  not  hours  or  health  or  any- 
thing except  the  work  ahead.  Themselves  untried  and  new, 
they  teamed  together  in  a  new  and  untried  machine  and  made 
it  perform  as  well  as  if  its  bearings  had  been  worn  smooth  by 
tradition,  as  well  as  if  they  themselves  had  grown  up  in  the 
work.  We  have  named  but  a  few  of  them,  those  who  filled  the 
outstanding  positions;  but  there  were  many  others  called  to 
places  of  responsibility — scores  upon  scores.  The  reader  is 
privileged  to  cast  his  eye  down  the  third  column  of  the  sub- 
joined list  of  the  heads  of  various  parts  of  the  Board,  that  he 
may  see  for  himself  the  kind  of  men  who  did  the  work. 


THE  GIANT  HAND 


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President,  Brown  Hoisting  Machine: 
pany,  Cleveland,  Ohio 
President,  Liquid  Carbonic  Company, 
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Pennsylvania 
Law  firm,  Bulkley,  Hauxhurst,  Si 
Jamieson,  Cleveland,  Ohio 
President,  Buckeye  Steel  Castings  C 
Columbus,  Ohio 
President,  American  Seeding  Machii 
pany,  Inc.,  Springfield,  Ohio 
Manager,  Technical  Service  Departmi 

vay  Process  Company,  Syracuse,  New 
Statistician,  New  York  City 

Economic  geologist  and  chemist,  < 
of  mineral  properties;  residence,  £ 

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Law  firm,  Channing  &  Frothingham, 
Massachusetts. 

140  Nassau  Street,  New  York  City.  I 
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THE  GIANT  HAND 


r  Board  Former  Business 

Planning  and  Dean  of  Graduate  School  of  Business  Adminis- 
tration, Harvard  University 

.  No.  10,  Re-  Retired,  Cincinnati,  Ohio 

t,  Electric  and  Sales  engineer,  Allis-Chalmers  Manufacturing 
Company,  Milwaukee,  Wisconsin 
Pittsburg,  Pennsylvania 
Natural  Dye  President,  Haley-Hammond  Company,  New 
York  City 
Vice  president,  International  Shoe  Company, 
St.  Louis,  Missouri 
on  ;  succeeding  Treasurer,  The  Studebaker  Corporation,  South 
Bend,  Indiana 
>nd  Statistics  Dean  and  Professor  of  Accounting,  University 
of  California 
n  President,  American  Dredging  Company,  Phila- 
delphia, Pennsylvania 
Section  Vice  president  and  manager,  Peoria  Cordage 
Company,  Peoria,  Illinois 
on,  September,  General  manager,  Waukesha  Motor  Company, 
C.  C.  Hanch  Waukesha,  Wisconsin 
Section  Partner,  Sands  &  Lockie,  Boston,  Massachusetts 
n  Philadelphia,  Pennsylvania 

vision  Consulting  engineer,  Philadelphia,  Pennsyl- 
vania 
:ment  Member  firm  of  F.  C.  Huyck  &  Sons,  Albany, 

New  York 
Second  vice  president,  Realty  Guarantee  & 
Trust  Company,  Youngstown,  Ohio 

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New  Jersey 
Head  of  switchboard  departmen 

Electric  Company,  Boston,  Massai 
Manager,  personal  estate,  Chicago,  ] 

President,  California  Barrel  Con 
Francisco,  California 
Attorney,  Washington,  D.  C. 

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ORGANIZATION  AND  PERSONNEL          175 


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General  manager,  Pfister  &  Vogel  Leather 
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Electrical  and  Engineer,  Allis-Chalmers  Manufacturing  Com- 
pany, Milwaukee,  Wisconsin 
on  No.  i,  Re-  President,  Clinton  Wire  Cloth  Company, 
on  Worcester,  Massachusetts 
suiting  Section,  Acting  director,  Mellon  Institute,  Pittsburg, 
Pennsylvania 
1  Division  Senior  partner,  Morris  Wheeler  &  Company, 
Philadelphia,  Pennsylvania 
nt  Management  Professor  of  English  and  Government,  Harvard 
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Treasurer,  Wilkins  Securities  Corporation, 
Washington,  D.  C. 
Pulp  and  Paper  Vice  president,  Graham  Paper  Company,  St. 
Louis,  Missouri 

s  Board  Stenotypist,  Navy  Department,  residence, 
Rockford,  Illinois 
on  No.  20,  Re-  Vice  president,  Spokane  &  Eastern  Trust  Co., 
on  Spokane,  Washington 
ction  and  Ethyl  Sanderson  &  Porter,  engineers  and  contractors, 
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176  THE  GIANT  HAND 

Now,  a  few  words  about  the  division  of  effort  in  the  Board, 
the  scheme  of  its  organization,  and  the  interrelation  of  its 
various  parts.  The  work  of  the  War  Industries  Board  was 
essentially  that  of  stimulating  the  production  of  war  materials 
and  of  curtailing  the  production  of  nonwar  materials,  always 
with  thought  for  the  welfare  of  the  whole  industrial  structure 
when  the  war  should  end.  This  was  accomplished  by  regulation 
of  the  basic  economic  elements:  facilities,  materials,  fuel, 
transportation,  and  capital.  In  such  regulation  the  administra- 
tion of  priorities  proved  to  be  the  master  key  to  industrial 
control. 

The  hopper  of  the  mill  was  the  Requirements  Division.  In 
theory,  to  the  Requirements  Division  came  all  the  demands  for 
all  commodities,  which  demands  the  Division  assembled  and 
passed  on  to  the  chairman  to  enable  him  intelligently  to  direct 
the  work  of  the  commodity-section  chiefs,  who  were  in  charge 
of  supply  and  the  allocation  of  products.  The  Requirements 
Division  weighed  the  necessity  or  urgency  of  various  demands, 
considered  ways  and  means  of  stimulating  supply  when  it  was 
inadequate,  and  also  took  up  questions  of  whether  industrial 
curtailment  and  conservation  could  be  exercised  without  kill- 
ing the  nonwar  industries  affected.  This  Division  was  in  con- 
stant contact  with  the  principal  departments,  administrations, 
and  bureaus  of  the  War  Government.  Many  of  the  plans  origi- 
nated by  this  Division  were  carried  out  by  the  commodity  sec- 
tions, but  the  Clearance  Office  also  played  a  leading  role  in 
securing  urgently  needed  supplies  for  Army  and  Navy. 

Much  of  the  work  of  the  Requirements  Division  had  to  do 
with  the  conversion  of  nonwar  factories  into  munitions  plants. 
In  this  work  it  found  occasion  to  use  a  great  deal  of  first-hand 
information  from  the  field.  To  secure  general  industrial  intelli- 
gence the  Board  introduced  its  system  of  "regional  advisers." 
The  country  was  divided  into  twenty  districts,  or  regions,  for 
this  purpose,  with  a  regional  adviser,  an  appointee  of  the 
Board,  in  each.  He  worked  with  chambers  of  commerce  and 
other  business  associations  to  secure  pertinent  information 
about  local  conditions — about  plants  available  for  conversion, 


ORGANIZATION  AND  PERSONNEL          177 

labor  conditions,  capital  available  for  the  financing  of  indus- 
trial changes,  transportation  facilities,  and  so  on.  Without  such 
intimate  knowledge  in  Washington  of  conditions  in  the  field, 
there  would  always  have  been  danger  that  war  contracts 
involving  factory  conversions  would  be  loaded  upon  plants 
already  engaged  in  essential  work,  with  no  resulting  net  gain  of 
product. 

Akin  to  the  work  of  converting  factories  was  that  of  provid- 
ing entirely  new  war  plants.  This  was  in  the  domain  of  the 
Facilities  Division,  which  studied  new  projects,  advised  in 
the  selection  of  building  materials  in  order  to  avoid  long  rail- 
road hauls,  compiled  lists  of  contractors,  builders,  and  archi- 
tects, kept  records  of  the  existing  government  construction 
work,  so  that  new  work  would  be  allocated  to  concerns  not 
already  burdened  with  contracts,  prevented  the  creation  of 
new  facilities  where  old  and  existing  ones  could  be  made  to 
serve,  coordinated  the  efforts  of  all  government  departments 
so  as  to  prevent  duplication  of  work,  and  saw  to  it  that  when 
contractors  were  ready  for  building  materials,  the  materials 
were  ready,  too. 

In  a  way  the  Priorities  Division  was  the  pivot  on  which  the 
whole  Board  swung,  since  to  direct  the  priority  of  access  of 
facilities  was  the  simplest,  most  direct,  and  quickest  method 
of  obtaining  compliance  with  the  War  Industries  Board's 
wishes.  The  Priorities  Division  considered  priorities  in  trans- 
portation and  administered  priorities  in  production  and  in  the 
use  of  power  and  of  labor.  Necessity  forced  the  Division  to 
create  its  Nonwar  Construction  Section  which,  because  it 
inhibited  nearly  all  civilian  construction  work  during  the  war, 
became  the  target  for  most  of  the  criticism  leveled  at  the  War 
Industries  Board. 

The  Industrial  Adjustment  Committee  was  able  to  divert  a 
good  deal  of  this  usually  unmerited  and  frequently  unjust 
criticism.  This  committee  afforded  an  opportunity  for  dis- 
affected concerns  to  be  heard  in  plea  and  argument  before  any 
drastic  rulings  and  decisions  were  put  into  effect.  The  Adjust- 


178  THE  GIANT  HAND 

ment  Committee  was  the  outlet  through  which  nonwar  manu- 
facturing could  pass  to  become  essential  war  industry. 

The  Price  Fixing  Committee  determined  maximum  com- 
modity prices,  but  acted  only  when  the  Government  took  so 
much  of  any  supply  that  the  price  tended  to  rise.  As  an  exam- 
ple, the  Government  took  the  total  supply  of  wool,  first  fixing 
the  prices  and  then  buying  all  the  wool  at  the  prices  fixed ;  but 
the  Government  did  not  fix  the  price  of  cotton,  because  its  pur- 
chases of  cotton  were  not  large  enough  to  affect  cotton  prices. 
The  Committee's  prices  were  maintained  alike  to  all  purchas- 
ers :  its  function  was  to  protect  all.  That  it  was  able  to  perform 
most  of  its  work  through  agreements  with  war-service  com- 
mittees of  industries,  rather  than  through  harsh  regulation  and 
police  enforcement,  is  testimony  to  the  fine  attitude  of  Ameri- 
can business  during  the  war. 

The  Commodity  Sections  controlled  certain  industries  abso- 
lutely ;  certain  others  they  advised,  stimulated,  and  aided  only. 
At  one  time  or  another  the  production  and  use  of  chlorine, 
copper,  cotton  duck,  cotton  linters,  felts,  hides  and  skins, 
manganese  and  chrome,  optical  glass,  nitrate  of  soda,  platinum, 
steel  and  iron,  sulphur,  toluol,  turbines,  wood  chemicals,  and 
wool  were  entirely  controlled  by  the  War  Industries  Board — 
either  by  agreement,  as  with  steel,  or  by  actually  purchasing 
and  taking  over  the  entire  supply,  as  with  wool. 

The  Purchasing  Commission  for  the  Allies  assured  our  for- 
eign friends  of  the  lowest  prices  and  swiftest  deliveries  and 
brought  together  the  foreign  requisitions  en  bloc  to  reconcile 
them  with  our  own,  to  the  end  that  no  one  country  should  have 
to  wait  while  the  others  were  served. 

The  Labor  Division  dealt  with  all  labor  questions  which 
came  before  the  War  Industries  Board.  The  work  of  the  Divi- 
sion included  activities  in  the  reclamation  of  manpower  and 
waste  materials,  utilization  of  the  work  of  prisoners,  the  edu- 
cation and  vocational  training  of  crippled  soldiers,  sailors,  and 
industrial  workers,  the  standardization  of  industry  in  penal 
institutions,  road  work  for  prisoners,  and  work  for  discharged 
or  paroled  prisoners. 


o 

H 


ORGANIZATION  AND  PERSONNEL          179 

Industrial  conservation  was  an  element  in  almost  every  act 
of  the  War  Industries  Board.  Most  of  the  executive  units  of 
the  Board  initiated  or  enforced  projects  in  conservation,  but 
the  Conservation  Division  itself  had  general  supervision  of  this 
work.  Briefly,  industrial  conservation  was  the  elimination  of 
waste  and  lost  motion  in  industry,  whether  of  power,  labor, 
materials,  or  methods. 

In  this  great  organization  there  was  one  startling  defect, 
one  glaring  omission — the  War  Industries  Board  maintained 
no  publicity  department.  How  it  ever  managed  to  struggle 
along  through  without  this  modern  adjunct  to  executive  per- 
formance must  be  left  for  other  analysts  to  discover.  Having 
failed,  however,  to  provide  himself  with  specialized  spokes- 
manship,  Mr.  Baruch  was  forced  to  rely  upon  the  volunteer 
offices  of  the  regular  press  correspondents  of  Washington  in 
order  to  let  the  country  know  what  the  Board  was  doing.  Mr. 
Baruch  made  himself  accessible,  and  his  subordinates  had  his 
permission  to  "talk"  at  any  time.  The  Board  received  a  steady 
flow  of  news  publicity ;  and  the  correspondents  seemed  to  take 
kindly  to  the  arrangement,  for,  when  the  curtain  was  rung 
down  and  the  chairman  ended  his  work,  they  presented  to  him 
a  gold  penknife  as  a  token  of  their  esteem. 

Such  was  the  War  Industries  Board.  Crystallizing  amid  the 
nebulse  of  previous  mistakes,  it  flashed  forth  in  the  govern- 
mental firmament  as  a  radiant  new  star,  to  shine  for  a  brief  day 
and  then  to  die.  Of  all  the  war  administrations  in  Washington, 
this  one,  which  had  exerted  more  power  than  any  of  the  others, 
was  the  first  to  disintegrate.  Its  people  held  active  places  in  the 
workaday  world ;  and  when  the  armistice  came,  they  swallowed 
their  disappointment  that  American  war  industry  had  not  had 
time  to  throw  its  full  weight  against  the  foe  and  hastened  back 
to  help  set  the  industrial  world  to  rights.  They  scarcely  paused 
to  write  down  the  record  of  what  they  had  done.  They  had 
given  America  her  first  and  only  experience  with  governmental 
industrial  control.  And  they  left  behind  them  a  legacy  to 
future  America — a  great  lesson  learned.  It  is  this :  In  any  im- 
portant war  of  the  future,  American  industry  must  be  as  thor- 


i8o  THE  GIANT  HAND 

oughly  disciplined  and  controlled  as  America's  Army  on  land 
and  America's  Navy  at  sea.  And  by  the  very  nature  of  future 
war — because,  for  all  we  can  now  see,  war  will  become  more 
and  more  mechanical,  more  and  more  an  affair  of  machinery — 
the  control  of  the  industry  which  supplies  the  machinery  must 
inevitably  become  a  power  superior  to  the  powers  which 
maneuver  the  forces  on  land  and  sea. 


INDEX 


AETONE: 
Production    and    conserva- 
tion of,  127 
Allies : 
Activities  of,  in  American  war 

industry  in  1917-1918,  1 

Dependent  on  America  for  war 

essentials,  89-90 

Difficulty    in    mobilization    of 

industrial  resources  of,  4 

Obligation     upon     America     to 

furnish  materials  to,  3 

Purchasing   Commission   for, 

87-89,   178 
Reluctance   of,  to  cooperate  in 

war  industrial  control,        146-147 
American  Industry: 

See  Industry,  American 
American  People: 

Idealism   of,   as   factor   in   war 

morale,  9 

Reliance  of,  upon  Government 

to  keep  out  of  war,  4 

American  War  Industry: 

See  War  Industry,  American 
Anderson,  Chandler  P.: 
As  member  of  Foreign  Mission 

of  War  Industries  Board,         152 
Armsby,  George  N. : 

As  member  of  Foreign  Mission 

of  War  Industries  Board,         152 
Artificial   Dye  and   Intermediates 

Section : 

Function  of,  123-124 

See  also  Dye  Industry 
Aviation  : 

Emphasis  upon,  during  early 
days  of  America's  participa- 
tion in  war,  xii 


Status  of,  in  Army  at  time  of 
declaration  of  war,  xv 


BARUCH,  BERNARD  M.: 
Ability  to  judge  men,  30 

Activities  in  private   life,         28-29 

Activities  in  supplying  Allies 
with  explosives,  136-137 

Appointment  as  chairman  of 
War  Industries  Board,  27,  32-33 

As  chairman  of  Committee  on 
Raw  Materials,  24-25 

As  member  of  Council  of  Na- 
tional Defense,  18,  24 

Confidence  of  President  Wilson 
possessed  by,  31 

Method  by  which  he  kept  in 
touch  with  industry,  162 

Powers  of,  as  chairman  of  War 
Industries  Board,  7,  IS 

Price  ultimatum  served  on  Brit- 
ish Government  by,  147 

Secret  of  his  success,  28-31 

Treatment  of  subordinates  by,  29-30 
Boyd,  Henry  W.: 

As  member  of  Foreign  Mission 

of  War  Industries  Board,          152 
British  Government: 

Warned  by  B.  M.  Baruch  to 
grant  United  States  preferred 
prices  on  war  supplies,  147 

Brookings,  Robert  S. : 

As  chairman  of  Price  Fixing 
Committee,  74,  161 

Authority  possessed  by,  77 

Characteristics  of,  74,  75 

Direction  of,  over  finished  war 
products,  24 


182 


INDEX 


Browning  Machine  Gun  : 
Early    adoption    of,    urged    by 

machine  gun  board,  xiz-xx 

Success  of  industry  in  produc- 
ing, xxi 
See  also  Machine  Guns 
Building  Construction,  Nonwar: 
Curtailment  of  activities  in,  by 

Priorities  Board,  49-51 

Building  Industry: 

Size  of,  5° 

Speech  of  Senator  Calder  ques- 
tioning war  strictures  upon,        50 
War  status  of,  52-53 

Bush,  Samuel   P.: 

As  chief  of  Facilities  Division,    161 
Business,  American : 
See     Industry,     American     and 
War  Industry,  American 


BALDER,     WILLIAM     M., 
\^t  U.  S.  SENATOR: 

Resolution  and  speech  of,  ques- 
tioning curtailment  of  nonwar 
building  construction,  50 

Carr,  James  A.: 
As  business  manager  for  Pur- 
chasing  Commission    for   the 
Allies,  87 

Census,  Federal : 
Valueless  in  mobilization  of  in- 
dustry for  war,  14 
Chairmen  of  International  Indus- 
trial Committees: 
America  not  invited   to   attend 

conferences  selecting,  153-154 

Chamberlain,    George    E.,    U.    S. 

Senator: 
Attack  by,  on   military   supply 

program,  xxiv-xxv 

Reply  of  President  Wilson  to 

criticism  of,  xxv 

Chamber    of    Commerce    of    the 

United  States: 

Formation  of  Committee  on  Na- 
tional Defense  by,  4 


Organization  of  manufactur- 
ers' war-service  committees 
by,  25,  99 

Chase,  M.  F.: 

As  chief  of  Explosives  Section,    138 
Chatillon,  George  E. : 
As  chief  of  Optical  Glass  Sec- 
tion, 121 
Chemicals : 
Control  of,  by  War  Industries 

Board,  124-125 

Clearance   Committee : 

Creation  of,  and  activities,       92-93 
Failure   of,  to  function  as  ex- 
pected, 92-94 
Reorganization  of,  94 
Clearance  in  War  Industry: 

Necessity  for,  92-94 

Clearance  Office : 

Activities  of,  94-95.  176 

Coal: 

Chemistry  of,  123 

Coffin,  Howard  E.: 
As  member  of  Council  of  Na- 
tional Defense,  18 
Pioneer  activities  of,  in  indus- 
trial preparedness,  4 
Commercial  Economy  Board : 

Evolution  of,  65 

Committee  on  National  Defense: 
Formation   of,   by   Chamber   of 
Commerce     of     the     United 
States,  4 

Commodity  Sections: 
As    agents    of    War    Industries 

Board,  99 

Duties  of,  101,  103 

List  of  commodities  controlled 

by,  104-105 

Competitive  Buying: 

Elimination  of,  on  part  of  gov- 
ernmental bureaus,  26 
Conference  with  Steel  Producers: 

Proceedings,  at,  109-110 

Congress,  United  States: 

Early  appropriation  by,  for  in- 
dustrial mobilization,  4 


INDEX 


183 


Conservation  Division  : 
Activities  and  accomplishments 

of,  67-70 

Duties  of,  65,  70 

Conservation,  Industrial : 
As   element  influencing  acts   of 

War  Industries  Board,        178-179 
Conservation  of  Shipping  Space : 
Effect   of,   upon   American    ex- 
plosives program,  135-136 
Consumption      of      Supplies      by 

Army: 

Comparison   with   civilian   con- 
sumption, 1 1 
Control  of  Industry: 

Necessity  for,  during  war,  12 

Control  of  Iron  and  Steel: 
As  first  important  step  taken  by 

War  Industries  Board,  113 

Copper: 

American  resources  of,  128 

Confusion  in  industry  produc- 
ing, 131 
Control  of  industry  producing,     133 
Diversity  of  uses  for,  in  war- 
fare,                                              128 
Early  war  prices  agreed  upon 

by  producers  of,  130-131 

Effect  of  war  on  prices  of,  129 

Fixed  prices  for,  134-135 

German    governmental    encour- 
agement of  domestic  use  of,       128 
Investigation  by  Federal  Trade 
Commission  into  costs  of  pro- 
ducing, 131,  132 
Price    of,   as    fixed    by    Baruch 

bargain,  130 

Cotton  Linters : 

Agreement     to     furnish     entire 
American  supply  of,  to  Gov- 
ernment, 140 
Use  of,  in  manufacture  of  ex- 
plosives,                                115,  139 
Use  of,  in  various  commercial 

products,  139,  140 

Cotton  Linters  Pool : 

Formation  and  operation  of,  140-141 


Cotton  Linters  Section: 
Activities  of,  140 

Council  of  National  Defense  : 
As  a  compromise  between  paci- 
fists and  preparationists,  17 
Evolution  and  growth  of,              20 
Its  mandate,  17 
Limits  of  powers  of,                       19 
Officers  of,                                     17-18 
Public    opinion    in    regard    to 
early  activities  of,                          19 

Crawford,  E.  L.: 
As    assistant    commissioner    of 
finished  products,  161 

Creosote  Section : 
Results  accomplished  by,       125-126 


D 


ELAYS 
MENT 
PLIES : 

Causes  of, 


IN 
OF 


PROCURE- 
WAR   SUP- 


Xll,   Xlll,   XIV,   XV,   XV11, 

xviii,  xxiii,  xxiv,  xxvi 
Deutschland,   German   Submarine 

Freighter : 

Voyage  of,  to  America,  84 

Dillon,  Clarence  : 
As  assistant  to  chairman  of  War 

Industries  Board,  161 

Dollar-a-Year  Men : 
Motives  and   value   of  services 

of,  8-10 

Dye  Industry : 
Development     of,     in     United 

States,  123 

German  monopoly  of,  122 

Importance  of,  in  warfare,  122 


ESSENTIALITY     OF      IN- 
DUSTRIES : 

Determination  of  degrees  of,    47-49 
European  Allies  : 

See  Allies 
Explosives  Division  : 


Activities  of, 


137-138 


184 


INDEX 


177 


132 


161 


FACILITIES  DIVISION: 
Summary  of  duties  of, 
Federal  Trade  Commission: 
Investigation   of  copper  indus- 
try by,  131, 
Investigation   of  steel  industry 

by,  109 

Finished  Products  Division: 
Evolution  of,  into  specific  com- 
modity sections,  160-161 
Fletcher,  Rear  Admiral  F.  F.  : 
As  representative  of  Navy  upon 

War  Industries   Board, 
Food,  Production  of: 

As  branch  of  war  industry,  l 

Foreign  Mission  of  War  Indus- 
tries Board: 
Backed    by    President    Wilson 

and  U.  S.  Treasury,  151 

British      shoe      contract      with 

A.  E.  F.  upset  by,  157-158 

Delicacy  of  position  of,  in  Eng- 
land, 149-150 
Devastated  regions  investigated 

by,  after  armistice,  158-159 

Function  and  activities  of,     144,  146 
Members  of,  152-153 

Spanish    mules    for    A.    E.    F. 

secured  by,  156-157 

Value  of  services  of,  156,  157 

Frayne,  Hugh : 
Activities    in    War    Industries 

Board,  24,  96-98 

Freedom  of  Speech  and  Press: 

War  strictures  upon,  6 

Fuel     Administration,     United 

States : 

Success  of  Dr.  Garfield  in  man- 
aging, 27-28 

GARFIELD,  DR.  HARRY  A.: 
Estimate  of  services  of,  as 
United    States    fuel    adminis- 
trator, 27 
General  Munitions  Board : 
Creation,    duties,    and    achieve- 
ments of,                                   20-21 


Reasons  for  failure  of,  22-23 

Glass,  Optical : 
Control  of,  by  War  Industries 

Board,  121 

Development   of   American    in- 
dustry producing,  119-120 
Godfrey,  Dr.  Hollis: 
As  member  of  Council  of  Na- 
tional Defense,  18 
Goethals,  Major  General  George 

W.: 
As  representative  of  Army  upon 

War  Industries  Board,  162 

Gompers,  Samuel : 
As  member  of  Council  of  Na- 
tional Defense,  18-19 
Governmental  Buying : 
Revolution     in     practices     of, 
wrought    by    commodity    sec- 
tions, 26 
Government,  American : 

Neutrality    of,    before    declara- 
tion of  war,  85 


H 


"ARDWOOD  : 

Chemistry  of,  127 

High  Explosives: 
Obligations  of  America  to  sup- 
ply, to  anti-German  forces,       136 
Hughes,  John : 
As  member  of  Foreign  Mission 

of  War  Industries  Board,   152-153 
Hutchinson,  Dr.  Lincoln : 
As  member  of  Foreign  Mission 
of  War  Industries  Board, 


I 


153 


MPORTS  AND  EXPORTS : 

Control    of,    by    War    Trade 
Board,  91 

Individual  Freedom : 

Strictures  upon,  during  war,  6 

Industry,  American : 
American   characteristics   aiding 

government  control  of,  6-7 

As  source  of  supply  for  Allies 
at  beginning  of  war,  84-85 


Attitude  of  War  Industries 
Board  toward,  26-27 

Control  of,  as  alternative  to 
outright  seizure,  83 

Data  needed  in  mobilization  of,     14 

Disappearance  of  freedom  of,          6 

Extent  of  control  of  War  In- 
dustries Board  over,  5 

Inability  of,  to  provide  war 
supplies  under  normal  plan 
of  operation,  10-11 

Invincibility  of,  in  war,      xii,  xxvi 

Mobilized  by  War  Industries 
Board,  15 

Necessity  for  control  of,  12 

Valuelessness  of  federal  census 
in  mobilization  of,  14 

War  attitude  of,  8,  12-13,  i?8 

War- time  task  of,  11-12 

See  also  War  Industry,  Ameri- 
can 

Industrial    Adjustment    Commit- 
tee: 

Services  of,  177-178 

Interallied  Ordnance  Agreement: 

Obligation    of    America    under, 
to    produce   powder   and    ex- 
plosives, xxii,  136 
International  Executives  : 

Desire  of  England  to  control,      153 

Plans  for  formation  of  various,    153 
International   Industrial   Commit- 
tees: 

America  not  invited   to   attend 
conferences     selecting     chair- 
men for,  153-154 
International  Nitrates  Executive : 

Formation  and  plan  of  organi- 
zation of,  117 

Method  of  operation  of,         144-146 
International  Steel  Committee: 

See    Steel    Committee,    Interna- 
tional 
International  Tin  Executive : 

Negotiations    leading    to    estab- 


INDEX 

J 


lishment  of, 


148-149,  150-152 


K 

a 

LA 


185 

ACKLING,  D.  C.: 

Activities  of,  in  American 
powder  manufacture,  as  Di- 
rector of  United  States  Gov- 
ernment Explosives  Plants, 

xxii-xxiii 

James,  George  R. : 
As  chief  of  Cotton  Linters  Com- 
modity Section,  140 
Jute  : 

Controversy  between  America 
and  England  regarding  price 
of,  147-148 

ING,  V.  L.: 

As  chief  of  Artificial  Dye 
and  Intermediates  Section,  123 

ABOR: 

Activities  of  War  Indus- 
tries Board  in  connection 
with,  96-98 

Shortage  of,  as  war  problem,    52-53 
Labor  Division : 

Activities  of,  97-98,  178 

Legge,  Alexander: 
Authority    conferred    upon,    by 

B.  M.  Baruch,  34 

Value  of  services  of,  as  vice 
chairman  of  War  Industries 
Board,  162-163 

Lewis  Machine  Gun : 

Consideration    of,    by    machine 

gun  board,  xix 

Triumph  won  by,  with  Allied 

armies,  xviii 

Lovett,  Robert  S.: 
As  member  of  War  Industries 
Board,  24 

ACHINE  GUN  BOARD: 

Early    procurement    o  f 
Browning  guns  urged  by,    xix-xx 
Machine  Guns : 

Delay  of  War  Department  in 
procuring  manufacture  of, 

xx-xxi 

Tests  of,  at  Springfield  Armory, 
May,  1917,  xix 


M 


i86 


INDEX 


See    also     Browning     Machine 
Gun  and  Lewis  Machine  Gun 
Machinery : 

Evolution  of  use  of,  in  World 

War,  xi 

Mackall,  Paul: 
As  member  of  Foreign  Mission 

of  War  Industries  Board,         152 
Manufacturers'   War-Service 

Committees  : 
Organization    of,    and    service 

rendered  by,  25,  99-100 

Martin,  Dr.  Franklin: 
As  member  of  Council  of  Na- 
tional  Defense,  18-19 
Materials  for  Warfare: 

Necessity  for  supplying  Allies 

with,  85-86 

Transcending  importance  of,  in 

World  War,  3 

McAdoo,  W.  G.,  Secretary  of  the 

Treasury : 

Support  given  by,  to  foreign 
activities  of  War  Industries 
Board,  151 

McDowell,  Charles  D.: 

As  chief  of  Nitrates  Section,        117 
McKinstry,  Brigadier  General: 
Work  of,  in  estimating  damage 
in  devastated  war  regions, 

158-159 

McLennan,  Donald  R. : 
As  chief  of  Nonwar  Construc- 
tion Section,  50 
Meyer,  Eugene,  Jr.: 
As  chief  of  Nonfcrrous  Metals 

Section,  134 

Mobilization  of  Industry: 

Data  needed  for,  14 

War  Industries  Board  as  agent 
for,  15 

NATIONAL  DEFENSE, 
COMMITTEE  ON: 

Formation  of,  by  Chamber  of 
Commerce  of  the  United 
States,  4 


National  Defense,  Council  of: 
See    Council    of    National    De- 
fense 

Navy  Department: 
Position  of,  as  war  customer  of 

American  industry,  i 

Reorganization    of    supply    bu- 
reaus of,  xxiii-xxiv 
Neutrality,  American : 
Maintenance    of,    by    Govern- 
ment   before    declaration    of 
war,  85 
Nitrate  Committee: 

Formation  of,  117 

Nitrates : 
American  buying  plan  for, 

117-118,  145 

Arrangement  with  DuPonts  to 
supply,  to  Department  of 
Agriculture  in  1918,  118 

Chile,  as  the  only  natural  source 

of,  114 

Early  price  for,  guaranteed  by 

War  Industries  Board,  115 

Effect  of  war  on  prices  of,  115 

Episode  of  first  nitrate  bargain 

with  Chile,  116-117 

Formation  of  International 

Executive  in,  117,  144-146 

Necessity    for,    in    manufacture 

of  explosives,  115-116 

Normal  American  consumption 

of,  1 15 

Second  bargain  in,  118 

Nitrate  Section : 
Activities   of,   in   formation   of 
International  Nitrates  Execu- 
tive, 117 
Nixon,  Mr.: 
As  member  of  Foreign  Mission 

of  War  Industries  Board,         153 
Nonferrous  Metals  Section: 

Activities  of,  134-135 

Nonwar  Building  Construction: 
Protest  against   curtailment  of, 
by  Priorities  Board,  49-51 


INDEX 


187 


Nonwar  Construction  Section: 
Work  of, 


OCEAN  SHIPPING: 
Tonnage  shortage  as  factor 
in    American    munitions   pro- 
gram, 135-136 
Optical  Glass: 

See  Glass,  Optical 
Optical  Glass  Section: 
Work  of,  in  developing  Ameri- 
can optical  glass  industry,          121 
Ordnance  Department: 
Role  of,  in  operation  of  cotton 

linters  pool,  140-141 

Toluol  plants  built  by,  124 

Ordway,  Mr. : 
As  member  of  Foreign  Mission 

of  War  Industries  Board,         152 
Overman  Act: 

Effect  of,  on  powers  of  War 
Industries  Board,  27 

PAINT    AND    PIGMENTS 
SECTION: 

Activities  of,  126 

Parker,  Judge  Edwin  B. : 
As    priorities    commissioner    of 

the  War  Industries  Board,       42 
Characteristics,    duties,   and 

methods  of,  42-45 

Patterson,  Albert  M. : 
As  member  of  Foreign  Mission 

of  War  Industries  Board,          152 
Peek,  G.  N.: 

As  commissioner  of  finished 
products  in  War  Industries 
Board,  161 

Personal  Liberties: 

Strictures  upon,  during  war,  6 

Pierce,  Edward  A. : 
As  member  of  Foreign  Mission 

of  War  Industries  Board,         152 
Preparedness  for  War  : 
Emphasis     placed     by     World 
War  on  industrial  phase  of,      2-3 


Inventory  of  manufacturing  re- 
sources necessary  to  adequate,      14 
Pioneer    activities    of    Howard 

E.  Coffin  in  industrial,  4 

President,  The  : 

See   Wilson,   Woodrow,    Presi- 
dent of  the  United  States 
Price  Fixing  Committee : 
Accomplishments  of,  83 

Decisions  of,  executed  by  com- 
modity sections,  77-78 
Fixed  maximum  prices  only,         81 
Importance  of,  75 
Necessity  for,  74 
Place   of,  in   organization   con- 
trolling war  industry,             73-74 
Policy  of,        75,  76,  78-79,  80,  81,  82 
Representatives  of  various  gov- 
erning   bodies    holding   mem- 
bership on,  79 
Theory  underlying  acts  of,       81-83 
Prices,  Commodity: 
Element  of  priority  in,              36-37 
Reservation    by    War    Govern- 
ment of  right  to  control,  25 
Thoroughness     of    government 

control  of,  8 

Priorities : 

Necessity  for  control  of,     38,  39-40 
Priorities  Board: 

Duties  of,  45,  47 

Protest     against     building-con- 
struction order  of,  49-55 
Priorities   Commissioner   of   War 

Industries  Board : 

Duties  of,  42 

Priorities  Committee : 

Duties  of,  45 

Priorities  Division: 
As  pivot  on  which  War  Indus- 
tries Board  swung,  177 
Creation  of  Nonwar  Construc- 
tion Section  of,  178 
Publicity : 

Secured  by  War  Industries 
Board  without  press  depart- 
ment, 179 


i88 


INDEX 


Purchasing    Commission    for    the 

Allies: 

Accomplishments  of,  89 

Creation  and  function  of,  87-88,  178 
Members  of,  87 

Procedure  of,  88-89 

KJLROADS,  AMERICAN : 
Seizure     of,     by     Govern- 
ment, 27 
Raw  Materials : 
Early     activities     of     B.     M. 

Baruch  in  control  of,  24 

Evolution  of  Committee  on,          24 
Mobilization  of,  as  function  of 

War  Industries  Board,  15 

Replogle,  Leonard : 

As  chief  of  Steel  Division,  109 

Requirements  Division : 
Activities  of,  176 

System     of     regional     advisers 

established  by,  176-177 

Resources,  American : 

Lack  of  inventory  of,  as  embar- 
rassment in  mobilization,  13 
Necessity  for  future  inventory 

of,  14 

Resources    and    Conversion    Sec- 
tion: 

Accomplishments  of,  62-64 

Function  of,  58-62 

Ritchie,  A.  C. : 
As    general    counsel    for    War 

Industries  Board,  161 

Ritter,  W.  M.: 
As    assistant    commissioner    of 

finished  products,  161 

Robbins,  Walter: 
As    assistant    commissioner    of 

finished  products,  161 

Rosenwald,  Julius : 
As  member  of  Council  of  Na- 
tional Defense,  18 
Rubber: 

Desire  of  British  Government 
to  obtain  control  of  supply 
and  prices  of,  150 


Success  of  Foreign  Mission  in 
forcing  separate  consideration 
of  British  problem  in,  151 

QCHOELLKOPF,  J.  R.,  JR.: 
l^  As   chief   of   Artificial    Dyes 

and  Intermediates  Section,         123 
Scott,  Frank  A. : 
As  chairman  of  General  Muni- 
tions Board,  21 
As  chairman  of  War  Industries 

Board,  23 

Inability  of,  to  secure  adequate 
supply  studies  from  War 
Department,  xvii 

Methods  of  work,  22 

Qualifications  of,  for  service,        22 
Succeeded  by  Daniel  Willard,      27 
Scott,  John  W. : 
As     director     of     Textile     and 

Rubber  Division,  161 

Selective  Service  Act: 

Effect  of,  on  liberties  of  indi- 
vidual, 6 
Shaw,  A.  W. : 
As     director     of     Conservation 

Division,  65 

Economies  effected  by,  in  in- 
creasing spool  length  of 
thread,  68 

Importance  of  work  of,  70 

Methods  of,  66-67 

Qualifications  of,  for  service,         68 
Shipbuilding : 

As  a  war  industry,  l 

Shipping  Board,  United  States  : 

As  a  customer  of  war  industry,        2 
Shipping  Control  Committee : 

Creation  and  function  of,  91 

Steel: 
Conference     leading     to     fixed 

prices  for,  109-110 

Consumption  of,  in  war,  107 

Control  of,  by  War  Industries 

Board,  110-112 

Controversy  over  prices  paid 
by  Government  for,  108 


INDEX 


189 


Curtailment  of  use  of,  in  non- 
war  industries,  112-113 
Steel  Committee,  International : 

Coup  of  Foreign  Mission  in 
naming  chairman  of,  153-154 

Importance  of,  to  America,          154 

Paul  Mackall  as  chairman  of,     154 
Steel  Division : 

Evolution  and  function  of,          ill 
Steel  Industry : 

As  first  industry  to  accept  gov- 
ernment control,  108,  113 

Warned   by   President  to   hold 

down  prices,  108 

Steel  Prices: 

Controversy  between  United 
States  Shipping  Board  and 
Emergency  Fleet  Corpora- 
tion over,  108 

Differentials  in,  determined  by 
producers,  1 1 1 

Effect  of  war  upon,  107-108 

Investigation  of,  by  Federal 
Trade  Commission,  109 

Merits  and  injustices  of  fixed,     113 

Terms  of  agreement  fixing,         no 
Stock  Exchange  : 

Effect  of  war  upon,  3,  85 

Summers,  Leland  L. : 

Activities  of,  in  Europe, 

H9.  151.  153-155 
As  head  of  Foreign  Mission  of 

War  Industries  Board,  146 

As    technical    adviser    to    War 

Industries  Board,  137 

Supreme  War,  Council : 
As  author  of   Interallied   Ord- 
nance Agreement,  136 
Swope,  Herbert  B. : 
As    assistant    to    chairman    of 
War  Industries  Board, 


161 


AUSSIG,  F.  W.: 

As  member  of  Price  Fixing 
Committee,  78 

Statement  of,  on  proceedure  of 
Price  Fixing  Committee,        78-79 


T 


Textile  and  Rubber  Divisions : 

John  W.  Scott  as  director  of,      161 
Thread : 

Economies   effected  by  increas- 
ing spool  length  of,  68 
Tin: 

Monopoly  of  England  in,  150 

Negotiations    leading    to    estab- 
lishment     of      International 
Executive  in,          148-149,  150-152 
United    States    Steel    Products 
Corporation       as       American 
agent  in  International  Execu- 
tive in,  151-152 
Toluol : 

Control  of  production  of,       123-124 
War  production  of,  124 

Trading  with   Enemy  Act: 
Effect    of,    on    American    dye 

industry,  123 

Treasury  Department: 

Backing  given  by,  to  Foreign 
Mission  of  War  Industries 
Board,  147,  151 

Trench  Warfare: 
Beginnings  of,  3 

T  TNITED  STATES  STEEL 
U    PRODUCTS    CORPORA- 
TION: 

As  American  agent  in  Interna- 
tional Tin  Executive,  151-152 


W 


'AR  DEPARTMENT: 

Adverse     opinion    as     to 
supply  program  of,  xv-xvi 

As  largest  customer  of  war 
industry,  1-2 

Attack  on  supply  program  of, 
by  Senator  Chamberlain, 

xxiv-xxv 

Burden  thrown  on  Allies  by 
lack  of  initiative  in,  in  pro- 
curing machine  guns,  xxi 

D.  C.  Jackling  summoned  by, 
to  build  United  States  pow- 
der plants,  xxii 


INDEX 


Delay  of,  in  starting  manu- 
facture of  Browning  machine 
guns,  xx 

Delay  of,  in  starting  supply 
program  as  cause  of  later 
failures,  xvii 

Early  ignorance  of  chief  offi- 
cers of,  in  questions  of  quar- 
termaster supply,  xvii 

Early  indifference  of  officials 
of,  to  danger  of  war,  xiv 

Early  lack  of  overhead  control 
of  supply  bureaus  of,  xxiii-xxiv 

Effect  of  Senator  Chamber- 
lain's attack  on  supply  pro- 
gram of,  xxv 

Evolution  of  organization  of, 
in  1918,  xx  vi 

Failure  of,  to  make  preliminary 
study  of  war  needs,  xiv 

Faulty  organization  of,  respon- 
sible for  delays  in  supply 
program,  xxiii 

Favorable  opinion  as  to  sup- 
ply program  of,  xvi 

Indecision  of,  in  starting  pro- 
curement of  war  supplies,  xviii 

Industrial  chaos  resulting  from 
independent  operations  of 
bureaus  of,  xxiv 

Military  observers  of,  with 
foreign  armies  before  1917, 

xiv-xv 

Status  of  aviation  in,  during 
1917,  xv 

Success  of  man-power  program 
of,  xxv 

Success    of   munitions   program 

of,  in  1918,  xxvi 

Warfare : 

Evolution  of,  in  modern  times,       xi 
War  Industries  Board : 

Activities  of,  15-16,  176 

Artificial  Dye  and  Intermedi- 
ates Section  of,  123-124 

As  agent  of  government  con- 
trol of  industry,  2 


As  branch   of  Council   of  Na- 
tional  Defense,  23,  34,    161 
Attitude  of,  toward  industry, 

26-27,  91-92 
Bernard      M.      Baruch      made 

chairman  of,  by  President,  27,  32 
Chief  officers  of,  list,  164-175 

Clearance  Committee  of,  92-94 
Clearance  Office  of,  94-95,  176 

Commodity  sections  of,  99-106 

Completeness  of  powers  of,  5,  7-8 
Conservation  Division  of,  65-70 
Contracts  never  made  by, 

87-88,  124,  138-139 
Control    of    steel    as    factor   in 

power  of,  113 

Cotton  Linters  Section  of,  140-141 
Creation  of,  14-15,  23 

Creosote  Section  of,  125-126 

Efficiency  of,  24 

Evolution    of    Finished    Prod- 
ucts Division  of,  160-161 
Explosives  Division  of,          137-138 
Facilities  Division  of,             161-177 
Foreign  activities  of,  supported 

by  President  and  Treasury,       151 
Importance     of    control     of 

priorities  by,  55-56 

Influence  of,  in  Europe,  143-144,  159 
Lesson  taught  America  by 

experience  of,  179-180 

Letter   from    President   confer- 
ring powers  and  functions  of, 

32-33 
Members    of    Foreign    Mission 

of,  152-153 

Nonferrous  Metals  Section  of,  134 
Optical  Glass  Section  of,  121 

Organization  changes  in,  15,  160-161 
Original  limitation  of  powers 

of,  23,  161 

Paint  and  Pigment  Section  of,  126 
Price  Fixing  Committee  of, 

73-83,  161 

Prices   of   chief  war  commodi- 
ties fixed  by,  40 
Requirements   Division   of,            176 


INDEX 


191 


Resources  and  Conversion  Sec- 
tion of,  58,  62-64 

Separation  of,  from  Council  of 
National  Defense,  34 

Steel  Division  of,  109-113 

Value  of  services  of,  in  expand- 
ing powder  industry,  137 
War  Industry,  American : 

Condition  of,  at  time  of  visits 
of  Allied  military  missions, 

xii-xiii 

Confusion  in,  during  1917,  xii,  xxiv 

Controversy     over     merits     of 
accomplishments   of,  xv-xvi 

Difficulty  in  controlling,  not  at 
first  understood,  5 

Extent  of,  l 

Necessity  for  control  of,  2 

Response    of,    to    well-directed 
guidance,  xxvi 

Speed  as  a  prime  consideration 
in,  83 

See  also  Industry,  American 
Warner  &  Swasey: 

F.  A.  Scott  as  general  manager 

for,  22 

War,  Secretary  of: 

Machine   gun   board   appointed 
by,  xix 

Negotiations  of,  with  DuPonts 
for  erection  of  powder  plants,  xxii 

Preliminary  report  of  machine 
gun  board  to,  xix-xx 

Responsibility    of,    for    faulty 
organization  of  War  Depart- 
ment, xxvi 
War-Service   Committees : 

Formation  and  function  of, 

25,  99-100 


War  Trade  Board: 

Control  of  imports  and  exports 

by,  91 

Whiteside,  Mr.: 

As  member  of  Foreign  Mission 

of  War  Industries   Board,        152 
Willard,  Daniel: 

As  chairman  of  War  Industries 
Board,  27 

As  member  of  Council  of  Na- 
tional Defense,  18 
Williams,  Harrison : 

As  assistant  to  chairman  of  War 

Industries  Board,  161 

Wilson,   Woodrow,    President   of 
the  United  States: 

Confidence  of,  possessed  by 
Bernard  M.  Baruch,  31 

Expansion  of  powers  of,  under 
Overman  Act,  27 

Letter  from,  making  Bernard 
M.  Baruch  chairman  and  stat- 
ing powers  and  functions  of 
War  Industries  Board,  32-33 

Reply  of,  to  Senator  Chamber- 
lain's attack  on  army  supply 
program,  xxv 

Support  given  by,  to  foreign 
activities  of  War  Industries 
Board,  151 

Warning  of,  to  steel  industry  to 
hold  down  prices,  108 


Y 


EATMAN,  POPE: 


Metals  Section, 


134 


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